Reference no: EM132884449

1.Company A has made substantial investments in specialized assets and, in theory, because of this investment, has become dependent on Company B. Company B can threaten to change orders to other suppliers as a way of driving down Company A's prices. Company B is highly unlikely to change suppliers because it is, in turn, a major supplier to Company A and also has made major investments in specialized assets to serve their needs. These companies are mutually dependent because of the specialized investment the other has made. Thus, Company B is unlikely to renege on any pricing agreements with because it knows that Company A would respond the same way. This is an example of which of the following?

a.Hostage taking
b.Market discipline
c.Credible commitment
d.Modularity
e.Parallel sourcing policy

2.In which of the following stages of successful acquisition is timing an essential component?

a.Elimination of any duplication of facilities or functions
b.Bidding strategy
c.Identification and screening
d.Learning from experience
e.Integration

3.Which of the following describes a benefit of a long-term cooperative relationship over a short-term alliance?

a.All of these are benefits of a long-term cooperative relationship. They both gain from their relationship.
b.The businesses jointly find ways to lower costs or increase product quality so both players gain from the relationship.
c.Resulting cost savings are shared by suppliers who make substantial investments in specialized assets to better serve the needs of a particular business, and another company.
d.It is a substitute for vertical integration because it creates a relatively stable, long-term partnership that allows both companies to obtain the same kinds of benefits that result from vertical integration.
e.It can help avoid the problems such as bureaucratic costs that arise from managerial inefficiencies that result when a company owns its own suppliers.