Q&A Hero

Q: When a company operates in the markets of two or more different countries, its foremost strategic decision is A. whether to use strategic alliances to help defeat its rivals. B. whether to vary the company's competitive approach to fit specific market conditions and buyer preferences in each host country or whether to employ essentially the same strategy in all countries. C. whether to maintain a national (one-country) manufacturing base and export goods to the other countries. D. which foreign companies to team up with via strategic alliances or joint ventures. E. whether to test the waters with an export strategy before committing to some other competitive approach.

Q: Which of the following is not one of the problems and risks of cross-border strategic alliances, that is, between domestic and foreign firms? A. Overcoming language and cultural barriers, and the sometimes extensive managerial time required for trust-building, communication, and coordination B. The trouble allies can have reaching mutually agreeable ways to deal with key issues C. Becoming overly dependent on another company for essential expertise and competitive capabilities D. Making it harder to pursue a multidomestic strategy as compared to a global strategy E. Suspicions about whether allies are being forthright in exchanging information and expertise

Q: Which of the following is not a potential benefit of strategic alliances or other cooperative arrangements between foreign and domestic companies? A. Obtaining wider access to attractive country markets B. Gaining better access to scale economies in production and/or marketing C. Filling competitively important gaps in technical expertise and/or knowledge of local markets D. Safeguarding the company's dependence, allowing for positive engagement once the purpose has been served and ensuring products of important technical standardization requirements are not developed E. Sharing distribution facilities and dealer networks, thus mutually strengthening access to buyers

Q: Which is not one of the four conditions that make entry via an internally developed start-up strategy in a foreign country appealing? A. When creating an internal start-up is cheaper than making an acquisition B. When adding new production capacity will adversely impact the supply-demand balance in the local market C. Having the ability to gain good distribution access D. Having scale economies to compete against local rivals E. All of these choices are correct.

Q: Strategic alliances, joint ventures, and cooperative agreements between domestic and foreign firms are a potentially fruitful means for the partners to A. enter additional country markets. B. gain better access to scale economies in production and/or marketing. C. fill competitively important gaps in their technical expertise and/or knowledge of local markets. D. share distribution facilities and dealer networks, thus mutually strengthening their access to buyers. E. All of these choices are correct.

Q: Acquiring an existing firm operating in a foreign country rather than undertaking internal development may be the least risky and cost-efficient means of overcoming entry barriers such asA. gaining access to local distribution networks, building supplier networks, and establishing working relationships with key government officials.B. moving directly to the task of transferring resources and personnel, and integrating and redirecting activities into the acquiring firm's operation.C. putting the acquiring firm's strategy into place.D. accelerating efforts to build a strong market presence.E. All of these choices are correct.

Q: Establishing a wholly owned subsidiary in a foreign market to take advantage of all essential value chain activities requires a strategy that A. establishes a wholly owned subsidiary. B. acquires a foreign company. C. supports direct control over all aspects of operating in a foreign market. D. establishes a start-up operation. E. All of these choices are correct.

Q: The disadvantages of using a franchising strategy to pursue opportunities in foreign markets do not include A. maintaining quality control. B. having to decide whether to allow foreign franchisees to modify the franchisor's product offering to better satisfy the tastes and expectations of local buyers. C. foreign franchisees that do not always exhibit strong commitment to consistency and standardization. D. franchisees bearing most of the costs and risks of establishing foreign locations, so a franchisor has to expend only the resources to recruit, train, support, and monitor franchisees. E. the ability to build multiple profit sanctuaries.

Q: The advantages of using a franchising strategy to pursue opportunities in foreign markets include A. franchisees bear most of the costs and risks of establishing foreign locations, and the franchisor is required to expend only the resources to recruit, train, and support foreign franchisees. B. its being particularly well suited to the global expansion efforts of companies with multicountry strategies. C. the ability to build multiple profit sanctuaries. D. its being particularly well suited to companies that employ cross-market subsidization. E. its being particularly well suited to the global expansion efforts of manufacturers.

Q: The advantages of using a licensing strategy to participate in foreign markets include A. being especially well suited to the use of cross-market subsidization. B. being able to charge lower prices than rivals. C. enabling a company to achieve competitive advantage quickly and easily. D. being able to leverage the company's technical know-how or patents without committing significant additional resources to markets that are unfamiliar, politically volatile, economically uncertain, or otherwise risky. E. being able to achieve higher product quality and better product performance than with an export strategy.

Q: The advantages of using an export strategy to build a customer base in foreign markets include A. being able to minimize shipping costs, avoid tariffs, and curb the effects of fluctuating exchange rates. B. minimizing capital requirements and involvement in foreign markets. C. being cheaper and more cost effective than licensing and franchising. D. being cheaper and more cost effective than a multicountry strategy. E. facilitating the establishment of profit sanctuaries in foreign countries and being more suited to accommodating local buyer tastes than a global strategy.

Q: Using domestic plants as a production base for exporting goods to selected foreign country markets A. can be an excellent initial strategy to pursue international sales. B. can be a competitively successful strategy when a company is focusing on vacant market niches in each foreign country. C. works well when a firm does not have the financial resources to employ cross-market subsidization. D. is usually a weak strategy when competitors are pursuing multicountry strategies. E. can be a powerful strategy because the company is not vulnerable to fluctuating exchange rates.

Q: Which of the following are strategy options for entering foreign markets? A. maintaining a national (one-country) production base and exporting goods to foreign markets B. establishing a subsidiary in a foreign market C. franchising and licensing strategies D. forming strategic alliances or joint ventures with foreign partners E. all of these choices are correct.

Q: Which of the following is not one of the strategy options for expanding into markets of foreign countries? A. a profit sanctuary strategy B. an export strategy C. a licensing strategy D. establish a subsidiary in a foreign market strategy E. a franchising strategy

Q: The strategic options for expansion into foreign markets include A. employing a franchising strategy. B. maintaining a national (one-country) production base and exporting goods to foreign markets. C. licensing foreign firms to produce and distribute one's products. D. establishing a subsidiary in a foreign market. E. All of these choices are correct.

Q: Government host policies are not likely to increase a country's political and economic risks when A. the national government is unstable or weak. B. incentives such as reduced taxes, low-cost loans, and site-development assistance are provided to companies agreeing to construct or expand production and distribution facilities. C. there is distress in the country's monetary system. D. there are threats from piracy and lack of protection for the company's intellectual property. E. there is new onerous legislation or regulations on foreign-owned businesses.

Q: Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is true? A. Fluctuating exchange rates pose no significant risks to a company's competitiveness in foreign markets. B. Competitive advantages of manufacturing goods in a particular country are largely unaffected by fluctuating exchange rates. C. Exporters are advantaged when the currency of the country where goods are being manufactured grows stronger. D. Exporters always gain in cost/price competitiveness when the currency of the country in which the goods are manufactured is weak. E. Exporters always lose in cost/price competitiveness when the currency of the country in which the goods are manufactured is weak.

Q: Competitive advantages of manufacturing goods in a particular country and exporting them to foreign markets A. are largely unaffected by fluctuating exchange rates. B. are greatest when local distributors and dealers in that country can be convinced not to carry products that are made outside the country's borders. C. can be wiped out when that country's currency grows weaker relative to the currencies of the countries where the output is being sold. D. are eroded when the manufacturing country's home currency strengthens relative to the currencies of the foreign countries where the output is being sold. E. are seriously compromised by the potential for local government officials to raise tariffs on the imports of foreign-made goods into their country.

Q: The advantages of manufacturing goods in a particular countryA. are not impacted by where production, distribution, and customer service activities are located.B. are not affected by differences in operating costs and profitability due to wage rates and worker productivity.C. are not affected by differences in energy costs, environmental regulations, tax rates, and inflation rates.D. are not influenced by cheaper access to essential natural resources.E. None of these choices are correct.

Q: Competing in the markets of foreign countries generally does not involve which of the following?A. country-by-country differences in consumer buying habits, tastes, and preferencesB. country-by-country variations in host-government regulations, fluctuating exchange rates, and economic policiesC. choices to customize the company's offerings to each country market or to offer a primarily standardized product to all markets around the globeD. choices to locate company operations on the basis of variations in wages rates, worker productivity, energy costs, tax rates, and distribution channelsE. crafting a multicountry strategy that can transform the world market into one big profit sanctuary

Q: Competing in the markets of foreign countries entails dealing with such factors as A. fluctuating exchange rates, country-to-country variations in host-government restrictions and requirements, and variations in cultural, demographic, and market conditions. B. important country-to-country differences in consumer buying habits and buyer tastes and preferences. C. whether to customize the company's offerings in each different country market or whether to offer a mostly standardized product worldwide. D. the fact that product designs suitable for one country are sometimes inappropriate in another. E. All of these choices are correct.

Q: Factors surrounding the decision to enter into the markets of foreign countries do not include A. market growth rates that vary from country to country. B. country-by-country differences in consumer tastes and buying habits. C. fluctuating exchange rates and country-by-country variations in host-government restrictions and requirements. D. product designs that may be suitable for one country but inappropriate for another. E. None of these choices are correct.

Q: Market size and growth rates in different countries can be influenced positively or negatively by A. population sizes, income levels and cultural influences, the current state of the infrastructure, and distribution and retail networks available. B. the ability of management to tailor a strategy to take into consideration country differences. C. the large size of emerging markets such as China and India. D. competitive rivalry that is only moderate in some countries. E. All of these choices are correct.

Q: One of the biggest strategic challenges to competing in the international arena includeA. how to avoid the risks of shifting exchange rates.B. whether to charge the same price in all country markets.C. how many foreign firms to license to produce and distribute the company's products.D. whether to offer a mostly standardized product worldwide or whether to customize the company's offerings in each different country market to match the tastes and preferences of local buyers.E. whether to pursue a global strategy or an international strategy.

Q: Which one of the following is not a reason a company decides to enter foreign markets? A. spreading business risk across a wider geographic market base B. capitalizing on company competencies and capabilities C. achieving lower costs and enhance the firm's competitiveness D. building the profit sanctuary necessary to wage guerrilla offensives against global challengers endeavoring to invade its home market E. gaining access to new customers

Q: Which of the following is not a typical reason for a company to expand into the markets of foreign countries? A. gaining access to new customers B. strengthening its capability to employ offensive strategies, especially those that involve preemptive strikes C. achieving lower costs and enhance the firm's competitiveness D. capitalizing on company competencies and capabilities E. spreading business risk across a wider geographic market base

Q: The reasons a company opts to expand outside its home market include A. gaining access to new customers for the company's products/services. B. spreading its business risk across a wider market base. C. achieving lower costs and enhancing the company's competitiveness. D. a desire to capitalize on its core competencies and capabilities. E. All of these choices are correct.

Q: The reasons behind the accelerating pace of globalization includeA. countries with previously planned economies are embracing market or mixed economies.B. information technology shrinks the importance of geographic distances.C. ambitious, growth-minded countries race to build global share.D. lower barriers to international trade.E. All of these choices are correct.

Q: Explain the pros and cons of bypassing regular sales channels in favor of direct sales and Internet retailing.

Q: What types of companies are the best for offensive-minded challengers to target?

Q: What does launching a preemptive strike entail? Under what circumstances is this offensive strategy most effective?

Q: Explain what is meant by hit-and-run or guerrilla warfare type offensive strategies.

Q: List four reasons that strategic alliances and collaborative partnerships might fail to live up to each partner's expectations.

Q: What are the most common reasons companies enter into strategic alliances and collaborative partnerships?

Q: What are the merits of outsourcing the performance of certain value chain activities as opposed to performing them in-house? Under what circumstances does outsourcing make good strategic sense?

Q: What are the strategic disadvantages of a vertical integration strategy?

Q: What are the strategic advantages of a forward vertical integration strategy?

Q: What are the strategic advantages of a backward vertical integration strategy?

Q: Identify and briefly explain what is meant by each of the following terms:a. outsourcing strategyb. vertical integration strategyc. first-mover advantaged. first-mover disadvantagee. horizontal and vertical scope

Q: Under what sorts of circumstances are mergers with or acquisitions of other companies a better solution than entering into partnerships or alliances with these companies? How do mergers and/or acquisitions contribute to enhancing a company's position?

Q: Identify five objectives of a merger and acquisition strategy.

Q: In what sorts of circumstances is it strategically advantageous to be a fast follower or late mover as opposed to a first mover?

Q: What are the strategic advantages of being a first mover? What are the strategic advantages of being a follower or late mover?

Q: What is the purpose of defensive strategy?Give at least two examples of defensive moves.

Q: What is a blue ocean strategy, what is its appeal, and what is its drawback?

Q: Identify and briefly explain five types of offensive strategies.

Q: The Achilles' heel (or biggest danger/pitfall) of relying heavily on alliances and cooperative strategies isA. that partners will not divide profits from the alliance in an equitable manner.B. becoming dependent on other companies for essential expertise and capabilities.C. incurring excessive administrative expenses associated with engaging in collaborative efforts.D. having to compromise the company's own priorities and strategies in reaching agreements with partners.E. that strategic allies frequently become rivals in the marketplace.

Q: Which of the following is not a typical reason that many alliances do not live up to expectations? A. inability of partners to work well together B. emergence of more attractive technological paths C. changing conditions make the purpose of the alliance obsolete D. disagreement over how to divide the added market share and profits gained from joint collaboration E. diverging objectives and priorities

Q: Experience indicates that strategic alliances A. are generally successful. B. work well in cooperatively developing new technologies and new products but seldom work well in promoting greater supply chain efficiency. C. work best when they are aimed at achieving a mutually beneficial competitive advantage for the allies. D. stand a reasonable chance of helping a company reduce competitive disadvantage but very rarely form the basis of a durable competitive advantage over rivals. E. are usually a company's best approach to building a distinctive competence.

Q: Which of the following is not a typical reason that many alliances prove unstable or break apart? A. diverging objectives and priorities B. an inability to work well together C. the emergence of more attractive technological paths D. disagreement over how to divide the profits gained from joint collaboration E. changing conditions that make the purpose of the alliance obsolete

Q: Strategic alliances are more likely to be long lasting when A. they involve collaboration with suppliers or distribution allies or when both parties conclude that continued collaboration is in their mutual interests. B. the alliance involves partners based in countries with distinctly different cultures and consumer buying habits and preferences. C. both partners are experienced with strategic alliances and routinely enter into collaborative agreements with firms in peripheral industries. D. the alliance involves joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own. E. each partner has considerable resource weaknesses in the marketplace.

Q: The reasons firms enter into strategic alliances is toA. expedite the development of new technologies.B. overcome deficits in their operation.C. improve supply chain efficiency.D. acquire or improve market access.E. All of these choices are correct.

Q: Which one of the following is not a strategically beneficial reason a company may enter into strategic partnerships or cooperative arrangements with key suppliers, distributors, or makers of complementary products? A. to acquire or improve access to new markets B. to expedite the development of promising new technologies or products C. to enable greater vertical integration D. to improve supply chain efficiency E. to overcome deficiencies in technical and manufacturing expertise and to create desirable new skill sets and capabilities

Q: The competitive attraction of entering into strategic alliances and collaborative partnerships is A. in allowing companies to bundle resources and competencies that are more valuable in a joint effort than when kept separate. B. reducing costs, transferring skills, and expanding the product line. C. enabling greater vertical integration. D. in allowing the partners to transfer intellectual property rights and proprietary information. E. in helping the partners to increase their respective market shares.

Q: A strategic alliance A. is a collaborative arrangement in which companies join forces to defeat mutual competitive rivals. B. involves two or more companies joining forces to pursue vertical integration. C. is a formal agreement between two or more companies in which there is strategically relevant collaboration of some sort, joint contribution of resources, shared risk, shared control, and mutual dependence. D. is a partnership between two companies that is typically intended to eliminate the need to engage in outsourcing. E. is usually a cheaper and more effective way for companies to join forces than is a merger.

Q: Which of the following is not one of the key benefits of employing an outsourcing strategy? A. It allows a company to concentrate on its core business, leverage its key resources and core competencies, and do even better what it already does best. B. It can hollow out a firm's own capabilities and lose touch with activities and expertise that contribute fundamentally to the firm's competitiveness and market success. C. It reduces the company's risk exposure to changing technology and/or buyer preferences. D. It improves organizational flexibility and speeds time to market. E. It involves an activity that can be performed better or more cheaply by outside specialists.

Q: The big risk of employing an outsourcing strategy is A. the increased time it takes to respond effectively to the fresh strategic moves of rival firms. B. hollowing out the competitive capabilities a company needs to be a master of its own destiny. C. impairing a company's capability to be a leader in product innovation. D. increased vulnerability to shifts in buyer demand. E. increased costs of differentiating the company's product/service from those of competitors.

Q: Outsourcing the performance of value chain activities presently performed in-house to outside vendors and suppliers makes strategic sense when A. an activity can be performed better or more cheaply by outside specialists. B. it allows a company to focus on its core business and leverage its key resources. C. outsourcing won't adversely hollow out the company's technical know-how, competencies, or capabilities while it improves organizational flexibility and speeds time to market. D. it improves organizational flexibility and speeds time to market. E. All of these choices are correct.

Q: Outsourcing strategies A. are nearly always a more attractive strategic option than merger and acquisition strategies. B. carry the substantial risk of raising a company's costs. C. carry the substantial risk of making a company overly dependent on its suppliers. D. increase a company's risk exposure to changing technology and/or changing buyer preferences. E. involve farming out value chain activities presently performed in-house to outside specialists and strategic allies.

Q: Backward integration involves A. performing industry value chain activities previously performed by suppliers or other companies engaged in earlier stages of the value chain. B. linking with businesses within the array of value chain activities to eliminate competition and broaden the product offering. C. capitalizing on company's underutilized managerial capabilities for achieving greater synergistic cost advantages. D. reducing the opportunity for achieving greater product differentiation. E. developing new skills and business capabilities.

Q: Which of the following is not a strategic disadvantage of vertical integration? A. Vertical integration boosts a firm's capital investment in the industry, thus increasing business risk if the industry becomes unattractive later. B. Integrating backward into parts and components manufacture can impair a company's operating flexibility when it comes to changing out the use of certain parts and components. C. Vertical integration limits a company's ability to achieve greater product differentiation and to exercise direct control over the costs of performing value chain activities. D. Forward or backward integration often calls for radically different skills and business capabilities than the firm possesses. E. Vertical integration poses all kinds of capacity-matching problems.

Q: Bypassing regular sales channels in favor of Internet retailing can have strong appeal if it A. raises distribution costs and ignores channel conflicts. B. provides a relative cost disadvantage over rivals. C. offers lower margins resulting in higher selling prices to end users. D. includes partnering rather than competing with existing distributors. E. All of these choices are correct.

Q: Which of the following is typically the strategic impetus for forward vertical integration? A. being able to control the wholesale/retail portion of the industry value chain B. having fewer disruptions in the delivery of the company's products to end users C. gaining better access to end users and better market visibility D. broadening the company's product line E. allowing the firm access to greater economies of scale

Q: The strategic impetus for forward vertical integration is to A. gain better access to end users, improve market awareness, and/or include the end user's purchasing experience as a differentiating feature. B. the opportunity to capture the profits being earned by forward distribution allies (and thereby increase the company's own profits). C. reduce or eliminate disruptions in the delivery of the company's products to end users. D. avoid channel conflict. E. expand a company's geographic coverage.

Q: Which one of the following statements about backward vertical integration is false? A. What makes backward vertical integration such an attractive strategic option is the opportunity to capture the profit margins of suppliers and thereby increase the company's own profitability. B. Backward vertical integration can produce a differentiation-based competitive advantage when a company, by performing activities internally rather than utilizing outside suppliers, ends up with a better-quality product/service offering, improves the caliber of its customer service, or in other ways enhances the performance of its final product. C. For backward integration to be a viable and profitable strategy, a company must be able to (1) achieve the same scale economies as outside suppliers and (2) match or beat suppliers' production efficiency with no drop in quality. D. The best potential for being able to reduce costs via a backward integration strategy exists in situations where suppliers have outsized profit margins, where the item being supplied is a major cost component, and where the requisite technological skills are easily mastered or can be gained by acquiring a supplier with the desired technological know-how. E. Potential advantages of backward integration include sparing a company the uncertainty of being dependent on suppliers for crucial components or support services and lessening a company's vulnerability to powerful suppliers inclined to raise prices at every opportunity.

Q: For backward vertical integration into the business of suppliers to be a viable and profitable strategy, a company must A. have considerable expertise in supply chain management, transportation logistics, and inventory control techniques. B. be able to achieve the same scale economies as outside suppliers and match or beat suppliers' production efficiency with no drop in quality. C. have large state-of-the-art production facilities so that it can fully capture all economies of scale in producing parts and components. D. have core competences in R&D, product design and engineering, and distribution logistics so that it will have adequate capabilities to produce and distribute parts and components in a timely and cost-effective manner. E. have a distinctive competence in production process technology and at least a core competence in manufacturing R&D.

Q: The two best reasons for investing company resources in vertical integration (either forward or backward) are to A. speed entry into foreign markets and/or exercise stronger control over operating costs. B. broaden the firm's product line and/or enable the company to charge a premium price for its product/service. C. gain a first-mover advantage in adopting new production technologies and/or employ potent defensive strategies. D. strengthen the company's competitive position and/or boost its profitability. E. achieve greater product differentiation and/or gain better access to prospective buyers.

Q: A good example of forward vertical integration is a A. producer of organic vegetables deciding to acquire a compost company. B. footwear manufacturer developing own-branded retail stores. C. crude oil refiner purchasing an oil well drilling and exploration company. D. hospital opening a nursing home for the aged. E. maker of prescription drugs acquiring a chemical manufacturer.

Q: Vertical integration strategies can aim at A. full integration (participating in all stages of the industry vertical chain). B. partial integration (building positions in selected stages of the value chain). C. tapered integration (involves both outsourcing and performing the activity internally). D. forward integration (value chain activities performed by distributors) or backward toward suppliers. E. All of these answer choices are correct.

Q: The two most compelling reasons for a company to pursue vertical integration (either forward or backward) are to A. expand into foreign markets and/or control more of the industry value chain. B. broaden the firm's product line and/or avoid the need for outsourcing. C. enable use of offensive strategies and/or gain a first-mover advantage over rivals in revamping the industry value chain. D. strengthen the company's competitive position and/or boost its profitability. E. achieve product differentiation and/or lengthen the company's value chain to include more activities performed in-house and thereby gain greater ability to reduce internal operating costs.

Q: Vertical integration strategies A. extend a company's competitive and operating scope because its operations extend across more parts of the total industry value chain. B. are one of the best strategic options for helping companies win the race for global market leadership. C. are a cost-effective means of expanding a company's lineup of products and services. D. are particularly effective in boosting a company's ability to expand into additional geographic markets, particularly the markets of foreign countries. E. are a good strategy option for improving a company's supply chain management capabilities, pursuing efforts to remodel a company's value chain, achieving direct control over the costs of performing value chain activities, and gaining access to buyers.

Q: Mergers and acquisitions A. are nearly always successful in achieving their desired purpose (unlike strategic alliances and collaborative partnerships). B. all too frequently do not produce the hoped-for outcomes. C. are generally more effective in securing a new competitive advantage than in protecting an existing competitive advantage. D. are highly risky because of the financial drain that comes from using the company's cash resources to pay for the costs of the merger or acquisition. E. are usually more successful in helping a company's shift from one competitive strategy to another than in improving a company's competitive strength and resource capabilities.

Q: Why do mergers and acquisitions sometimes fail to produce anticipated results?A. they do not produce the hoped-for outcomes, and changes to existing operations may not eventuate.B. cost savings may prove smaller than expected.C. gains in competitive capabilities may take substantially longer to materialize or may never do so.D. efforts to mesh corporate cultures can stall due to formidable resistance from organization members, and key employees can become disenchanted and leave.E. All of these choices are correct.

Q: Merger and acquisition strategies A. are never prone to mistakes, such as deciding which activities to leave alone and which activities to meld into their own operations and systems. B. may offer considerable cost-saving opportunities and can be beneficial in helping a company try to invent a new industry and lead the convergence of industries whose boundaries are being blurred by changing technologies and new market opportunities. C. are a particularly effective way of pursuing blue ocean and outsourcing strategies. D. seldom are a superior strategic alternative to forming alliances or partnerships with these same companies because of the financial drain of using the company's cash resources to accomplish the merger or acquisition. E. are one of the best ways to help a company strongly differentiate its product offering and use a differentiation strategy to strengthen its market position.

Q: Mergers and acquisitions are often driven by such strategic objectives as to A. expand a company's geographic coverage, extend its business into new product categories, or gain quick access to new technologies or other resources and capabilities. B. weaken the bargaining power of either key suppliers or key customers. C. reduce the company's vulnerability to industry driving forces. D. facilitate a company's shift from one type of competitive strategy to another. E. secure a higher credit rating and better access to additional financial capital.

Q: Which of the following is not a typical strategic objective or benefit that drives mergers and acquisitions? A. to gain quick access to new technologies or other resources and capabilities B. to create a more cost-efficient operation out of the combined companies C. to fundamentally alter a company's trajectory and improve its business outlook D. to expedite shifting from one strategy to another and gain better access to additional financial capital E. to extend a company's business into new product categories and/or expand a company's geographic coverage

Q: The difference between a merger and an acquisition isA. a merger involves one company purchasing the assets of another company with cash, whereas an acquisition involves one company becoming the owner of another company by buying all of the shares of its common stock.B. a merger is the combining of two or more companies into a single corporate entity (with the newly created company often taking on a new name), whereas an acquisition is a combination in which one company, the acquirer, purchases and absorbs the operations of another, the acquired.C. nonexistent; in both instances, two companies become one.D. the brands of both companies are retained in a merger, whereas with an acquisition, there is only one surviving brand name.E. a merger involves two or more companies deciding to adopt the same strategy, whereas an acquisition involves one company becoming the owner of another company but with each company still pursuing its own separate strategy.

Q: Market conditions and factors that tend not to favor first movers include A. growth in demand that depends on the development of complementary products or services that are not currently available and new industry infrastructure that is needed before buyer demand can surge. B. quick market penetration and strong loyalty among first-time customers. C. buyer behavior that is readily attracted to new technology or product features. D. conditions that make imitation difficult and absolute cost advantages that accrue to those who make early commitments to new technologies, components, or distribution channels. E. All of these choices are correct.

Q: When the race among rivals for industry leadership is a marathon rather than a sprint,A. it is best to be a fast follower than a first mover or a slow mover.B.C. fast followers find it easy to leapfrog the pioneer with even better next-generation products of their own.D. a slow mover may not be unduly penalized and first-mover advantages can be fleeting.E. being a first mover generally entails relatively low risk and carries a potentially big advantage.F. there are nearly always big advantages to being a slow mover rather than an early mover, especially as concerns avoiding the "mistakes" of first or early movers.

Q: In which of the following instances are first-mover disadvantages not likely to arise? A. when the costs of pioneering are much higher than being a follower and only negligible buyer loyalty or cost savings accrue to the pioneer B. when rivals are employing offensive strategies rather than defensive strategies C. when the products of an innovator are somewhat primitive and do not live up to buyer expectations D. when buyers are skeptical about the benefits of a new technology or product being pioneered by a first mover E. when rapid market evolution (due to fast-paced changes in technology or buyer preferences) gives fast followers and maybe even cautious late movers the opening to leapfrog a first mover's products with more attractive next-version products