Global Alliances

Strategic alliance is when two or more businesses form a partnership for a project, business venture or for the long term to create a new business

• True

• False

Which of the following is NOT a potential benefit of strategic alliances?

• Access to new markets and distribution channels

• Sharing of risks and costs

• Reduction of competitive intensity

• Decreased innovation and flexibility

What is the primary aim of strategic alliances in business?

• Increase competition in the industry

• Creates a competitive advantage greater that they could have on their own

• Achieve economies of scale

• Gain complete control over the market

Which of the following is NOT a type of strategic alliance?

• Joint venture

• Franchising

• Equity alliance

• Merger

Which of the following best describes a strategic alliance involving outsourcing?

• Two or more companies collaborate to jointly develop and market a product or service

• One company contracts another to perform certain functions or services on its behalf

• Companies merge to form a new entity with shared ownership and control

• Companies share resources and expertise to compete against each other in the market

A business buys another that has been operating and the acquired company ceased to exist.

State the type of strategic alliance.

What is a potential benefit of a strategic alliance involving acquisition?

• Enhanced flexibility in operations

• Creates a competitive and cost-efficient company

• Sharing of risks and costs

• Increased focus on core competencies

Acquisition of one company by another by going directly to the shareholders and making an offer to buy their shares or by using their voting power to place people on the board of directors to approve the acquisition.

State the type of acquisition.

Friendly acquisition is the purchase of majority shares through a negotiated process with consent of the board of directors and full disclosure to existing shareholders.

• True

• False

Which of the following best describes a strategic alliance involving a merger?

• Two companies collaborate to jointly develop and market a product or service

• Shareholders of two companies become the shareholders of a new merged company

• One company acquires another to gain control over its operations and assets.