________ 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?