Cooperative Strategy

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Question 1
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A cooperative strategy is a means by which firms work together to achieve a shared objective.

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Question 2
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According to the Chapter 9 Mini Case, in addition to their corporate-level alliance, Renault and Nissan have each formed vertical complementary strategic alliances with other companies.

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Question 3
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Strategic alliances are cooperative strategies between firms that combine their resources and capabilities to create a competitive advantage.

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Question 4
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Although growing in popularity with small and medium-sized firms because they can gain economies of scale, large companies tend to avoid strategic alliances.

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Question 5
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Strategic alliances have become the cornerstone of many firms' competitive strategy, particularly large global competitors.

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Question 6
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If a large Asian cosmetics firm was to engage in a 50-50 partnership with a large American chemical company to form a new company focused on creating advanced skin care products, this would be considered a joint venture.

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Question 7
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One area in which joint ventures are effective is the transfer of tacit knowledge as illustrated in the Chevron/China National Petroleum joint venture.

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Question 8
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Nonequity strategic alliances exist when two or more firms join together to create an independent firm.

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Question 9
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Nonequity strategic alliances are formed when one partner owns a much larger (or inequitable) share of the joint venture than do the remaining partner(s).

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Question 10
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Cooperation in slow-cycle markets is extremely rare because these industries are declining.

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Question 11
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Firms in slow-cycle markets can use alliances to enter restricted markets or to establish franchises in new markets.

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Question 12
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Acquisitions are the most common cooperative strategy used in standard-cycle markets.

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Question 13
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Firms in standard-cycle markets seek to gain economies of scale through cooperative alliances.

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Question 14
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In a vertical complementary alliance, firms share some of their resources and capabilities from the same stage of the value chain to create a competitive advantage.

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Question 15
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Horizontal complementary strategic alliances are designed so that each partner realizes equal benefits from equal investments in the alliance.

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Question 16
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A cooperative agreement between a hotel chain and a casino operator would be viewed as a horizontal complementary strategic alliance because as separate entities, the two firms would compete for the same customer.

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Question 17
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Using business-level strategic alliances to hedge against risk and uncertainty is most common in the slow-cycle markets.

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Question 18
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Collusion is a form of cooperative strategy.

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Question 19
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Tacit collusion is not explicitly illegal in the United States even though it results in higher prices for consumers.

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Question 20
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Tacit collusion tends to be least used as a business-level, competition-reducing strategy in highly concentrated industries such as airlines and breakfast cereals even though it results in higher prices for consumers.

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