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Question
Strategic alliances can help create the social setting within which tacit collusion may develop.
Answer
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A competitive advantage that lasts a very short period of time is known as a ________ competitive advantage.
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The cost of equity is equal to the interest a firm must pay its debt holders in order to induce those debt holders to lend money to the firm.
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Identify the conditions under which a strategic alliance can be rare and discuss the role that complementary resources can play in the rarity of strategic alliances.
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Q:
________ collusion exists when firms coordinate their production and pricing decisions not by directly communicating with each other but by exchanging signals with other firms about their intent to cooperate.
A) Explicit
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Q:
When one firm makes more transaction-specific investments in a strategic alliance than partner firms make, that firm may be subject to a form of cheating called ________ that occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.
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Q:
Strategic alliances are particularly valuable in facilitating market entry and exit when the value of market entry or exit is
A) high.
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Q:
A firm's ability to learn is known as its
A) competitive position.
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C) distinctive competence.
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Q:
Strategic alliances can create economic value through helping firms improve their current operations by
A) facilitating the development of technology standards.
B) facilitating tacit collusion.
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Sometimes the value of cheating in a joint venture is sufficiently large that a firm cheats even though doing so hurts the joint venture and forecloses future opportunities.
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In general, contracts are sufficient to resolve all the problems associated with cheating in an alliance.
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The primary purpose of organizing a strategic alliance is to enable partners in the alliance to gain all the benefits associated with cooperation while minimizing the probability that cooperating firms will cheat on their cooperative agreements.
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Capabilities theory suggests that an alliance will be preferred over going it alone when an exchange partner possesses valuable, rare, and costly-to-imitate resources and capabilities.
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In general, firms will prefer to go it alone rather than enter into a strategic alliance when the level of transaction-specific investment required to complete an exchange is low.
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Research on international joint ventures suggests that the existence of transaction-specific investments in their relationships makes these agreements relatively immune to holdup problems.
Q:
In an alliance a holdup occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.