Chapter 9—Cooperative Strategy
3. A cooperative strategy
a. is an integrated and coordinated set of commitments and actions designed to exploit core
competencies and gain a competitive advantage.
b. is a strategy in which firms work together to achieve a shared objective.
c. is an integrated and coordinated set of commitments and actions the firm uses to gain a
competitive advantage by exploiting core competencies in specific product markets.
d. specifies actions a firm takes to gain a competitive advantage by selecting and managing a
group of different businesses competing in different product markets.
4. A strategy in which firms work together to achieve a shared objective is
b. business level strategy.
c. corporate strategy.
d. cooperative strategy.
6. The use of strategic alliances
a. is unlikely to yield success if partnering firms are headquartered in the same country.
b. may be too restrictive to facilitate entry into new markets.
c. usually increases the investment necessary to introduce new products.
d. is more frequent than other types of cooperative strategies.
8. A competitive advantage that is developed through a cooperative strategy is called a collaborative or a
9. Which type of strategic alliance is best at passing tacit knowledge between firms?
a. primary cooperative strategic alliances
b. joint ventures
c. equity strategic alliances
d. nonequity strategic alliances
13. A strategic alliance in which the partners own different percentages of the new company they have
formed is called a(an)
a. equity strategic alliance.
b. joint venture.
c. nonequity strategic alliance.
d. cooperative arrangement.
15. China allows U.S. companies to ally with Chinese firms by purchasing minority ownership positions
in the Chinese firms. These relationships are called
a. joint ventures.
b. network strategies.
c. equity strategic alliances.
d. nonequity strategic alliances.
16. A nonequity strategic alliance exists when
a. two firms join together to create a new company.
b. two or more firms have a contractual relationship to share resources and capabilities.
c. two partners in an alliance own unequal shares in the combined entity.
d. the partners agree to sell bonds instead of stock in order to finance a new venture.
18. Firms participate in strategic alliances for all the following reasons EXCEPT to
a. enter markets more quickly.
b. acquire technology.
c. create values they could not develop acting independently.
d. retain tight control over intangible core competencies.
19. The global airline industry is one in which
a. national political interests prevent airlines from making international alliances.
b. the fast-cycle nature of the industry mandates heavy use of alliances.
c. most alliances tend to be vertical complementary.
d. alliance versus alliance competition dominates firm versus firm competition.
23. Firms in a standard-cycle market may form alliances in order to
a. take advantage of opportunities in emerging market countries.
b. more quickly distribute new products.
c. capture economies of scale.
d. share risky R&D investments.
27. A manufacturer of specialty jams and jellies has decided to ally itself with an orchard and vineyard
growing rare strains of fruit. This is a(an) ____ strategy.
a. vertical complementary
b. horizontal complementary
c. uncertainty reduction
34. The fact that the prices consumers pay for branded breakfast cereals are above the prices that would
exist if there were true competition suggests that the cereal manufacturers are engaging in
a. excessive cooperation.
b. joint ventures.
c. tacit collusion.
d. horizontal strategic alliances.
36. In free market economies, ____ must decide how rivals can collaborate with their competitors without
violating established regulations.
a. the invisible hand
b. the government
d. the business community
37. The risks of being accused of collusion are MOST likely under what type of alliance?
a. equity-based vertical complementary alliance.
b. equity-based horizontal complementary alliance
c. nonequity-based vertical complementary alliance.
d. nonequity-based horizontal complementary alliance.
39. A ____ cooperative strategy helps the firm diversify in terms of products offered, markets served, or
49. In the franchising strategy, the most important competitive advantage for the franchisee is the
a. brand name.
b. capital resources.
c. access to a consolidated market.
d. geographic locations.
55. In some countries, the only legal way for foreign firms to invest in the country is through
a. silent partner agreements.
c. wholly-owned subsidiaries.
d. partnership with a local firm.
57. In general, cross-border alliances are more ____ and ____ than domestic alliances.
a. uncertainty reducing, diversifying
b. complex, risky
c. highly leveraged, tightly monitored
d. flexible, trust-based
58. Stable alliance networks will most often
a. be used to enhance a firm’s internal operations.
b. appear in mature industries with predictable market cycles.
c. emerge in industries with short product life cycles.
d. emerge in declining industries as a way to increase process innovations.
67. One disadvantage of developing effective monitoring systems to manage a strategic alliance is that
a. firms will have to accept greater risks.
b. trust will be eroded.
c. spontaneous opportunities are minimized.
d. power coalitions will still develop.
1. Identify and define the different types of strategic alliances.
2. Explain the rationales for a cooperative strategy under each of the three types of basic market situations
(i.e., slow, standard, and fast cycles).
4. Identify the three types of corporate-level cooperative strategies.