SOM Chapter 9.docVIP

CHAPTER 9: STRATEGIC ALLIANCES TRUE/FALSE QUESTIONS 1. Currently alliances account for 35% of the revenue of the largest 1,000 firms in the United States. True False Answer: True Page: 278 Difficulty: Easy Chapter Objective: 1 2. A strategic alliance exists whenever three or more independent organizations cooperate in the development, manufacture, or sale of products or services. True False Answer: False Page: 278 Difficulty: Easy Chapter Objective: 1 3. In a nonequity alliance firms create a legally independent firm in which they invest and from which they share any profits that are created. True False Answer: False Page: 278 Difficulty: Moderate Chapter Objective: 1 4. In an equity alliance cooperating firms supplement contracts with equity holdings an alliance partners. True False Answer: True Page: 278 Difficulty: Moderate Chapter Objective: 1 5. When a firm cannot realize the cost savings from economies of scale all by itself, it may join in a strategic alliance with other firms so that together, both firms will have sufficient volume to be able to gain the cost advantages of economies of scale. True False Answer: True Page: 280 Difficulty: Moderate Chapter Objective: 2 6. In general, due to the intangible nature of knowledge, firms are not able to use alliances to learn from their competitors. True False Answer: False Page: 280 Difficulty: Moderate Chapter Objective: 2 7. When both parties to an alliance are seeking to learn something from that alliance, a learning race can evolve. True False Answer: True Page: 281 Difficulty: Moderate Chapter Objective: 2 8. Network industries are characterized by decreasing returns to scale. True False Answer: False Page: 281 Difficulty: Moderate Chapter Objective: 2 9. Firms with high levels of absorptive capacity will learn at higher rates than firms with low levels of absorptive capacity, even if these two firms are trying to learn exactly the same things in an alli