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Terms in this set (32)Corporate executives have three options at their disposal to drive firm growth: organic growth through internal development, external growth through alliances, or external growth through acquisitions. Globalization has also contributed to an increase in cross-border strategic alliances In contrast to mergers and acquisitions, strategic alliances also allow firms to circumvent potential ___________ including potential lawsuits filed by U.S. federal agencies or the European Union. legal repercussions A ___________ to strategic decision making breaks down a larger investment decision (such as whether to enter biotechnology or not) into a set of smaller decisions that are staged sequentially over time. real-options perspective The most common type of alliance is a ___________, which is based on contracts between firms. non-equity alliance, The most frequent forms of non-equity alliances are supply, distribution, and licensing agreements Equity alliances allow for the sharing of __________—knowledge that cannot be codified. tacit knowledge Tacit knowledge concerns knowing _________ a certain task how to do ___________ investments are equity investments by established firms in entrepreneurial ventures. corporate venture capital (CVC) In terms of frequency, ___________ are the least common of the three types of strategic alliances. joint ventures __________ is the process of merging with a competitor at the same stage of the industry value chain. horizontal integration As a rule of thumb, firms should go ahead with horizontal integration (i.e., acquiring a competitor) if the target firm is __________ inside the acquiring firm than as a continued standalone company. more valuable There are three main benefits to a horizontal integration strategy: ▪ Reduction in competitive intensity. Horizontal integration can favorably affect several of Porter's five forces for the surviving firms: strengthening bargaining power vis-à-vis suppliers and buyers, reducing the threat of entry, and reducing rivalry among existing firms Why do firms make acquisitions? Three main reasons stand out: ▪ To gain access to new markets and distribution channels. Do mergers and acquisitions create competitive advantage? No A related problem is __________, a form of self-delusion in which managers convince themselves of their superior skills in the face of clear evidence to the contrary. managerial hubris Corporate executives have three options at their disposal to drive firm growth: organic growth through internal development, external growth through alliances, or external growth through acquisitions. Why are strategic alliances are attractive? They enable firms to achieve goals faster and at lower costs than going it alone. What must strategic alliances do in order to create the foundation for a competitive advantage? form unique resource combinations that obey the VRIO criteria Which approach to strategic decision making takes a larger investment decision and divides it into multiple smaller decisions that happen over time? a real-options perspective Equity alliances require larger investments that non-equity alliances What is true about alliance management capability? it involves partner selection and alliance formation and a firm may need to employ it with several different alliances. One possible source of COSTS in a horizontal integration strategy is integration failure Because the size of organizations is typically positively correlated with prestige, power, and pay, principal-agent problems might be a reason to pursue M&A's. True An advantage of using a non-equity alliance to govern a strategic alliance is its flexibility and ease of initiation A firm might want to use strategic alliance to change the industry structure Non-equity alliances tend to share __________, which allows the firms to understand a certain process or product explicit knowledge What are the three choices in the build-borrow-buy framework? internal development, strategic alliances and acquisition of new resources Determining whether your internal resources are superior to those of competitors in the targeted area, can best be assessed by applying the VRIO framework The __________ provides a conceptual model that aids firms in deciding whether to pursue internal development, enter a contractual arrangement or strategic alliance, or acquire new resources, capabilities, and competencies. build-borrow-or-buy framework Rather than focusing on developing an alliance management capability in isolation, firms should develop a __________ that allows for the successful management of both strategic alliances and mergers and acquisitions relational capability Sets with similar termsCapstone Exam 3 Chapter 940 terms neelachoudhury Strategic Management Chapter #942 terms blakegary Ch967 terms areed2514 Chapter 921 terms wpkelley Sets found in the same folderChapter 6 - Business Strategy: Differentiation, Co…36 terms brian_dettmer CHAPTER 7 - Business Strategy: Innovation, Entrepr…68 terms brian_dettmer CHAPTER 8 - Corporate Strategy: Vertical Integrati…58 terms brian_dettmer CHAPTER 10 - Global Strategy: Competing Around the…31 terms brian_dettmer Other sets by this creatorBasic Insurance Concepts and Principles11 terms brian_dettmer Final Exam Chapters 12 & 1320 terms brian_dettmer Final Exam Chapters 10 & 1120 terms brian_dettmer Final Exam Chapters 8 & 920 terms brian_dettmer Recommended textbook solutions Information Technology Project Management: Providing Measurable Organizational Value5th EditionJack T. 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Operations Management: Sustainability and Supply Chain Management12th EditionBarry Render, Chuck Munson, Jay Heizer 1,698 solutions Other Quizlet setsCommunication39 terms aprilheegemanwi6PLUS EEOB Final True and False120 terms Chris_Baehr1 Sociology Midterm30 terms jennakp 씬 7단원.. 죽음17 terms universe09 Which of these are common reasons why companies enter into strategic alliances?A company may enter into a strategic alliance to expand into a new market, improve its product line, or develop an edge over a competitor. The arrangement allows two businesses to work toward a common goal that will benefit both.
What are the reasons for forming a strategic alliance quizlet?Strategic alliances rationales. - To achieve economies of scale and of learning. - To gain access to the benefits of other firm's assets. - To share costs and risks of innovation.
What is the most common type of strategic alliance?Non-equity strategic alliances
In a non-equity strategic alliance, partners pool resources toward a mutual business objective in a more informal agreement. There are no child entities or shared equity. For this reason, non-equity strategic alliances are one of the most common.
Why might two companies choose to form a strategic alliance rather than pursuing a merger or acquisition?Advantages of business alliances include access to and sharing of skills, products, and markets at a lower overall cost without the need for M&A. Disadvantages are limited control in some instances, profit sharing, and potential loss of trade secrets and skills to competitors.
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Which of the these are common reasons why companies enter into strategic alliances quizlet?
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