IBM CH10

Relational ______ refers to the successful management of an alliance through the building of successful ______ relationships between the firms' managers.

• Advantage; alliance

• Management; cooperative

• Capital; interpersonal

• Assets; working

One disadvantage of a strategic alliance is:

• It is difficult for a firm to enter into a foreign market.

• Competitors gain a low-cost route to new technology and markets.

• The fixed costs of developing new products tend to increase.

• A foreign firm tends to face higher trade barriers.

Within the context of value chain analysis, which of the following is an example of a support activity?

• Customer service

• Marketing and sales

• Research and development

• Information systems

Pressures for ______ imply that it may not be possible for a company to realise the full benefits of experience-curve and location economies.

• Consumer guidance

• Government approval

• Local responsiveness

• Cost reductions

In 2004, Warner Brothers entered into a joint venture with two Chinese partners to produce and distribute films in China. Warner Brothers chose to form this strategic alliance in order to:

• Share fixed costs and associated risks

• Establish technological standards for the industry that would benefit the firm

• Bring together complementary skills and assets that neither company could easily develop on its own

• Facilitate its entry into a foreign market

______ agreements are one way of achieving the goal of swapping skills and technologies that each company in a strategic alliance covers, and ensuring a chance for equitable gain.

• Sharing

• Joint venture

• Cross-licensing

• Learning

The concept of diminishing returns implies that when a company already has significant ______ built into its product offering, increasing that value by a relatively small amount requires ______ costs.

• Skills; increasing

• Costs; reducing

• Quality; reducing

• Value; significant

Michael Porter has argued that ______ and ______ are two basic strategies for creating value and attaining a competitive advantage.

• Quality; cost structure

• Low cost; high quality

• Differentiation; diversification

• Low cost; differentiation

Assume that the value of a base model computer to an average consumer is $300, the average price that Dell can charge a consumer for that product is $275, and the average unit cost of producing that product for Dell is $150. For this scenario, which statement is true?

• The consumer surplus per computer is $25.

• The higher the intensity of competitive pressure, the higher the price that Dell can charge relative to $300.

• The profit for Dell on each computer is $150.

• Dell can easily increase its price above $300.

Leveraging of a company's core competencies refers to:

• The core systems that are part of the business collective and are cross-functional.

• Developing business processes as the building blocks of transnational strategy.

• The core skills that link staff, style, and synergy.

• Developing skills within the company that cannot easily be matched by competitors.