Strategic Management Final Exam
Questions 100% Correct!!
Understand the Build-Borrow-Buy framework and be able to discuss its implications for decisions on
acquiring resources and capabilities - ANSWER- Corporate strategy = growth strategy
- Three options for growth:
Internal development: BUILD
Strategic alliance: BORROW (Contract, Licensing, Equity Alliance, Joint Venture)
Acquire new resources, capabilities, competencies: BUY
Why did Lyft enter into strategic alliances with GM and Waymo? What were the benefits of these
alliances for Lyft? For GM? For Waymo? - ANSWERLyft: able to expand its reach in the ridesharing
market
GM: provided vehicles and services
Waymo: provided self-driving technology
What are strategic alliances? Why do firms enter into these types of business relationships? -
ANSWERDefinition: a voluntary arrangement between firms that involves sharing of knowledge,
resources, and capabilities
- They enter because they want to strengthen competitive position, enter new markets, hedge
against uncertainty, access critical complementary assets, and learn from new capabilities
What are the benefits of internal development (build) vs. strategic alliances (borrow) vs.
mergers/acquisitions (buy)? - ANSWERInternal development
Benefits:
- Internal development is cheaper, more trusting because it comes from your company
Risks:
- Can be risky if the company is not trained enough, how can this affect them?
Strategic alliances:
Benefit:
, - Can create loyalty and trust with one another. Both alliances benefit from borrowing. There are
many resources involved.
Risk:
- trust, feeling in debt, financial reasons
Mergers/acquisitions:
Benefits:
- acquire new resources, capabilities, and competencies
Risks:
- costliest complex, difficult to reverse
Be able to describe the difference between non-equity alliances, equity alliances, and joint ventures -
ANSWERNon-Equity Alliances:
- partnership based on contracts
- supply arrangements, distribution agreements, licensing agreements, franchises
Equity Alliances:
- one partner takes a partial equity stake in other (GM/Lyft)
Joint Ventures: standalone organization, created and jointly owned by two or more parent
companies (Hulu)
What is the difference between explicit knowledge and implicit knowledge? Which is more valuable?
Understand the difference in levels of sharing of these types of knowledge among the different
strategic alliance types. - ANSWERExplicit: can articulate, write down, and share
Implicit: the application of explicit knowledge (most valuable)
What is meant by co-operation and the learning race, as they relate to strategic alliances? - ANSWER-
Co-opetition is the cooperation by competitors to achieve a strategic objective
- Learning races are situations in which both partners in a strategic alliance are motivated to form an
alliance for learning, but the rate at which the firms learn may vary
What are three components contribute to effective alliance management capability? - ANSWER-
partner selection and alliance foundation
- alliance design and governance
- post form alliance management
Questions 100% Correct!!
Understand the Build-Borrow-Buy framework and be able to discuss its implications for decisions on
acquiring resources and capabilities - ANSWER- Corporate strategy = growth strategy
- Three options for growth:
Internal development: BUILD
Strategic alliance: BORROW (Contract, Licensing, Equity Alliance, Joint Venture)
Acquire new resources, capabilities, competencies: BUY
Why did Lyft enter into strategic alliances with GM and Waymo? What were the benefits of these
alliances for Lyft? For GM? For Waymo? - ANSWERLyft: able to expand its reach in the ridesharing
market
GM: provided vehicles and services
Waymo: provided self-driving technology
What are strategic alliances? Why do firms enter into these types of business relationships? -
ANSWERDefinition: a voluntary arrangement between firms that involves sharing of knowledge,
resources, and capabilities
- They enter because they want to strengthen competitive position, enter new markets, hedge
against uncertainty, access critical complementary assets, and learn from new capabilities
What are the benefits of internal development (build) vs. strategic alliances (borrow) vs.
mergers/acquisitions (buy)? - ANSWERInternal development
Benefits:
- Internal development is cheaper, more trusting because it comes from your company
Risks:
- Can be risky if the company is not trained enough, how can this affect them?
Strategic alliances:
Benefit:
, - Can create loyalty and trust with one another. Both alliances benefit from borrowing. There are
many resources involved.
Risk:
- trust, feeling in debt, financial reasons
Mergers/acquisitions:
Benefits:
- acquire new resources, capabilities, and competencies
Risks:
- costliest complex, difficult to reverse
Be able to describe the difference between non-equity alliances, equity alliances, and joint ventures -
ANSWERNon-Equity Alliances:
- partnership based on contracts
- supply arrangements, distribution agreements, licensing agreements, franchises
Equity Alliances:
- one partner takes a partial equity stake in other (GM/Lyft)
Joint Ventures: standalone organization, created and jointly owned by two or more parent
companies (Hulu)
What is the difference between explicit knowledge and implicit knowledge? Which is more valuable?
Understand the difference in levels of sharing of these types of knowledge among the different
strategic alliance types. - ANSWERExplicit: can articulate, write down, and share
Implicit: the application of explicit knowledge (most valuable)
What is meant by co-operation and the learning race, as they relate to strategic alliances? - ANSWER-
Co-opetition is the cooperation by competitors to achieve a strategic objective
- Learning races are situations in which both partners in a strategic alliance are motivated to form an
alliance for learning, but the rate at which the firms learn may vary
What are three components contribute to effective alliance management capability? - ANSWER-
partner selection and alliance foundation
- alliance design and governance
- post form alliance management
