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• ________ strategy is a firm's theory of how to gain competitive advantage by operating in

several businesses or markets simultaneously.

• A ________ strategy exploits all the advantages of both global integration and local
responsiveness.

• True or false: If Wal-Mart were to purchase a factory to make socks and it planned to sell
these socks in its stores, this would be an example of forward vertical integration.

• A dominant-business firm generates between ________ and ________ percent of its revenues
from a single business unit.

• Risk reduction is one example of economies of scope firms may gain through diversification.
Name three other types of economies of scope.


• The difference between the current market price of a target firm's shares and the price a
potential acquirer offers to pay for those shares is known as a(n) ________


• ________ are complex sets of resources and capabilities that link different businesses in a
diversified firm through managerial and technical know-how, experience, and wisdom.

• In a ________, firms create a legally independent firm in which they invest and from which
they share any profits that are created.

• An airline and a hotel chain agreeing to allow hotel guests earn frequent-flyer miles are
seeking ________ synergies.


• When the management of a target firm does not want the firm to be acquired, this is known as
a ________.

• A ________ firm has not sold any shares on the public stock market.

• When the assets of two similar-sized firms are combined, this is known as a ________.

• True or false: firms seeking reciprocal synergies should pursue a nonequity alliance.

• Name three reasons why firms choose to expand internationally.

• True or false: In general, the FTC will allow any acquisition involving firms with
headquarters in the United States that could have the potential for generating monopoly or
oligopoly profits in an industry.


• Bic is an example of a firm using a ________________ diversification strategy (be specific).

• Currencies that are traded, and thus have value, on international money markets are called
________

• A licensing agreement is an example of a ________ form of strategic alliance.

• ________ exist in a firm when the value of the products or services it sells increase as a
function of the number of businesses in which the firm operates.

• True or false: strategic alliances have decreased in popularity in recent years.

• What is a learning race?

• Which economies of scope are costly to duplicate?

• For firms pursuing international strategies, what is an example of a hierarchical governance
option? Market governance option? Intermediate market option?

• What is tacit collusion?

• What is the most common reason strategic alliances fail?

• ________ exists when firms compete with each other in more than one market.

• What are the advantages and disadvantages of vertical integration?

• What is the difference between a market extension merger and a product extension merger?

• Moral hazard occurs when ________

• What is a golden parachute?

• What is a centralized hub structure? For what international strategies would this structure be
appropriate?