SEVI 3013 FINAL EXAM QUESTIONS & ANSWERS
Understand the Build-Borrow-Buy framework and be able to discuss its implications for
decisions on acquiring resources and capabilities - Answer -a conceptual model that
aids strategic leaders in deciding whether to pursue internal development (build), enter
a contractual arrangement or strategic alliance (borrow), or acquire new resources,
capabilities, and competencies (buy)
Why did Lyft enter into strategic alliances with GM and Waymo? - Answer -attempt to
close the gap w/ Uber
What were the benefits of these strategic alliances for Lyft? - Answer -- competitive
advantage from Uber
- looking for cash/capital to get things done
What were the benefits of these strategic alliances for GM? - Answer -- (equity alliance)
allowed the firm to tap into the 2nd largest mobile transportation network
- allowed to enter into the mobile transportations and logistics market
- equity investment also allowed to hedge against uncertainty
What were the benefits of these strategic alliances for Waymo? - Answer -- participate
to get into a new industry
- new market of ridesharing
What are the benefits of strategic alliances (Borrow)? - Answer -- flexible
What are the benefits of internal development (build)? - Answer -- controllable in
business
- less expensive
What are the benefits of mergers/acquisitions (Buy)? - Answer -- overcoming barriers of
entry
- pre-empt people from getting to business
What are the risks of internal strategic alliances (Borrow)? - Answer -long negotiations
and a lack of commitment and trust
What are the risks of internal development (build)? - Answer -time consuming and
overconfident w/ resources
What are the risks of mergers/acquisitions (Buy)? - Answer -most costly, complex, and
difficult to reverse strategic option
What are strategic alliances? - Answer -voluntary arrangement between firms that
involves sharing of:
, - knowledge
- resources
- capabilities
Why do firms enter into strategic alliances? - Answer -- strengthen competitive position
- enter new markets
- hedge against certainty
- access critical complementary assets
- learn new capabilities
Non-equity alliance - Answer -- partnership based on contracts
- supply agreements, distribution agreements, licensing agreements, franchise
Equity alliance - Answer -- one partner takes partial equity stake in other (GM/Lyft)
Joint venture - Answer -- standalone organization, created and jointly owned by 2 or
more parent companies (Hulu)
What is meant by co-opetition and the learning race, as they relate to strategic
alliances? - Answer -- Co-opetition: cooperation by competitors to achieve a strategic
objective
- Learning Race: situations where both partners in a strategic alliance are motivated to
form an alliance for learning, but the rate at which the firms learn may vary.
--example) Toyota & GM - alliance w/ competitor
whoever learned what they need to learn first, Toyota, dissolved the alliance and exited
the race
What three components contribute to effective alliance management capability? -
Answer -1. Partner selection & alliance formation
2. Alliance design & governance
3. Post-formation alliance mgmt.
Mergers - Answer -joining of 2 independent companies to form a combined entity
Acquisitions - Answer -- purchase of one company by another
- can be friendly / unfriendly (hostile)
Takeovers - Answer -one company takes control over another
Hostile takeovers - Answer -target company does not wish to be acquired
Why do firms pursue mergers? - Answer -Horizontal Integration
- merger w/ a competitor
- leads to industry consolidation
Understand the Build-Borrow-Buy framework and be able to discuss its implications for
decisions on acquiring resources and capabilities - Answer -a conceptual model that
aids strategic leaders in deciding whether to pursue internal development (build), enter
a contractual arrangement or strategic alliance (borrow), or acquire new resources,
capabilities, and competencies (buy)
Why did Lyft enter into strategic alliances with GM and Waymo? - Answer -attempt to
close the gap w/ Uber
What were the benefits of these strategic alliances for Lyft? - Answer -- competitive
advantage from Uber
- looking for cash/capital to get things done
What were the benefits of these strategic alliances for GM? - Answer -- (equity alliance)
allowed the firm to tap into the 2nd largest mobile transportation network
- allowed to enter into the mobile transportations and logistics market
- equity investment also allowed to hedge against uncertainty
What were the benefits of these strategic alliances for Waymo? - Answer -- participate
to get into a new industry
- new market of ridesharing
What are the benefits of strategic alliances (Borrow)? - Answer -- flexible
What are the benefits of internal development (build)? - Answer -- controllable in
business
- less expensive
What are the benefits of mergers/acquisitions (Buy)? - Answer -- overcoming barriers of
entry
- pre-empt people from getting to business
What are the risks of internal strategic alliances (Borrow)? - Answer -long negotiations
and a lack of commitment and trust
What are the risks of internal development (build)? - Answer -time consuming and
overconfident w/ resources
What are the risks of mergers/acquisitions (Buy)? - Answer -most costly, complex, and
difficult to reverse strategic option
What are strategic alliances? - Answer -voluntary arrangement between firms that
involves sharing of:
, - knowledge
- resources
- capabilities
Why do firms enter into strategic alliances? - Answer -- strengthen competitive position
- enter new markets
- hedge against certainty
- access critical complementary assets
- learn new capabilities
Non-equity alliance - Answer -- partnership based on contracts
- supply agreements, distribution agreements, licensing agreements, franchise
Equity alliance - Answer -- one partner takes partial equity stake in other (GM/Lyft)
Joint venture - Answer -- standalone organization, created and jointly owned by 2 or
more parent companies (Hulu)
What is meant by co-opetition and the learning race, as they relate to strategic
alliances? - Answer -- Co-opetition: cooperation by competitors to achieve a strategic
objective
- Learning Race: situations where both partners in a strategic alliance are motivated to
form an alliance for learning, but the rate at which the firms learn may vary.
--example) Toyota & GM - alliance w/ competitor
whoever learned what they need to learn first, Toyota, dissolved the alliance and exited
the race
What three components contribute to effective alliance management capability? -
Answer -1. Partner selection & alliance formation
2. Alliance design & governance
3. Post-formation alliance mgmt.
Mergers - Answer -joining of 2 independent companies to form a combined entity
Acquisitions - Answer -- purchase of one company by another
- can be friendly / unfriendly (hostile)
Takeovers - Answer -one company takes control over another
Hostile takeovers - Answer -target company does not wish to be acquired
Why do firms pursue mergers? - Answer -Horizontal Integration
- merger w/ a competitor
- leads to industry consolidation
