Question 1

Which of the following is NOT related to horizontal integration?

Accepted Answer

The number of activities a firm participates in up and down the industry chain is vertical integration, not horizontal integration.

Question 2

The mergers between Delta and Northwest Airlines,United Airlines and Continental,and Southwest and AirTran _____ in the industry overall.

Accepted Answer

Decreased competitive intensity is the primary benefit of horizontal integration.

Question 3

The main value of Oracle's acquisition of PeopleSoft is _____.

Accepted Answer

Oracle enjoyed optimized value chains by acquiring PeopleSoft.

Question 4

Horizontal integration can affect several of Porter's five forces for the surviving firms.Which of the following would this include?

Accepted Answer

Since firms grow larger and the competitors numbers decrease, a firm has stronger bargaining power.

Question 5

Based on Strategy Highlight 9.1,Kraft's hostile takeover of Cadbury was mainly motivated by Kraft's desire for _____.

Accepted Answer

Kraft's acquisition of Cadbury was done to tap into new distribution channels in both the U.S. and fast-growing international markets.

Question 6

Looking through the lens of the structure-conduct-performance (SCP)model,_____ changes in the underlying industry structure favor the surviving firms.

Accepted Answer

Horizontal integration enables firms to increase their organizational boundaries because the number of competitors decreases.

Question 7

The following characteristics are all related to acquisitions EXCEPT _____.

Accepted Answer

The combining of firms of comparable size is a merger, not an acquisition.

Question 8

_____ is NOT one of the drawbacks in horizontal integration.

Accepted Answer

Three negative aspects are discussed in horizontal integration. Lower costs would be a benefit in this kind of integration.

Question 9

_____ is a voluntary arrangement between firms that involves the sharing of knowledge,resources,and capabilities with the intent of developing processes,products,or services to lead to a competitive advantage.

Accepted Answer

This is the definition of strategic alliance.

Question 10

A ______ describes an acquisition in which the target company does not wish to be acquired.

Accepted Answer

Acquiring a firm despite its disapproval is a hostile takeover.

Question 11

The reasons firms enter into alliances include all of the following EXCEPT _____.

Accepted Answer

Reducing competitive intensity is a benefit of horizontal integration; it is not one of the reasons for firms to enter an alliance.

Question 12

According to _____,critical resources and capabilities frequently are embedded in strategic alliances that span firm boundaries.

Accepted Answer

The statements describe a relational view of competitive advantage.

Question 13

Firms would use strategic alliances to _____ in countries such as Saudi Arabia or China.

Accepted Answer

Strategic alliance is an entry vehicle for international market entry.

Question 14

Apple orchestrated a web of strategic alliances with publishing houses to challenge Amazon's early lead in the delivery of e-content.This was due to which of the following reasons listed?

Accepted Answer

The alliance allows publishers to control price, which is considered important to them. Once the publishers were on board, it significantly improved Apple's competitive position against Amazon.

Question 15

Adidas acquired Reebok because _____.

Accepted Answer

Adidas merged with Reebok in order to compete more effectively with Nike.

Question 16

Firms use _____ to lower costs through economies of scale,and thus enhance their economic value creation and,in turn,their performance.

Accepted Answer

Horizontal integration increases economies of scale.

Question 17

Despite M&A generally destroying rather than creating shareholder value,reasons for mergers include the following EXCEPT _____.

Accepted Answer

Access to new markets and distribution channels is an advantage of horizontal integration, and is not primarily the reason for merger.

Question 18

Which of the following is NOT considered as the benefit of horizontal integration?

Accepted Answer

Improvement of supply chain coordination is a benefit of vertical integration.

Question 19

_____ is the process of acquiring and merging with competitors,leading to industry consolidation.

Accepted Answer

Firms horizontally merge and acquire competitors to reduce competitive intensity.

Question 20

_____ is a form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary.

Accepted Answer

This is the definition of managerial hubris.

Quiz 9: Corporate Strategy: Acquisitions, Alliances, and Networks