What is an equity alliance? What motives would a firm have for forming an equity alliance? What ...

Answer to #1

An equity alliance is a collaborative arrangement in which at least one of the collaborating companies takes an ownership position in the other. In some cases, each party takes an ownership, such as buying part of each other's shares or by swapping shares with each other. The purpose of the equity ownership is to solidify a collaborating contract, such as a supplier-buyer contract, so that it is more difficult to breakparticularly if the ownership is large enough to secure a board membership for the investing company.

Answer to #2

Answer: B

Answer to #3

Turnkey operations are a type of collaborative arrangement in which one company contracts another to build complete, ready-to-operate facilities. Companies building turnkey operations are frequently industrial-equipment manufacturers and construction companies. The customer for a turnkey operation is often a governmental agency. One characteristic that sets the turnkey business apart from most other international business operations is the size of the contracts. Most contracts are for hundreds of millions of dollars, and many are for billions. Smaller firms often serve as subcontractors for primary turnkey suppliers. However, large companies are vulnerable to economic downturns when governments cancel big contracts. Payment for a turnkey operation usually occurs in stages, as a project develops. Because of the long time frame between conception and completion, the company performing turnkey operations can encounter currency fluctuations and should cover itself through escalation clauses or cost-plus contracts.

Answer to #4

Coordination is the way that managers connect the discrete activities of the value chain.
Several factors influence value chain coordination:
a. Operational obstacles: MNEs regularly run into problems when trying to get the various links of their global value chain to deal with each other. Communication challenges especially arise when trying to synchronize languages or deal with different time zones. Well-planned coordination preempts these threats, letting workers worry less about what is supposed to happen with material transfers and product delivery and worry more about creating value.
b. National cultures: National cultures can also impose higher hurdles in coordinating a transaction from one stage of the value chain with another. Units anchored in different cultures may disagree over how much information they should share or who should take lead responsibility. Coordination can then suffer from conflict.
c. Learning effects: Learning effects refer to cost savings that come from learning by doing. Managers, for example, learn by recurrence how to transfer best practices from one country to another, such as innovative ways to improve internal and external customer service. Successfully transferred, an MNE can convert higher productivity into lower costs or higher customer satisfaction into higher prices.
d. Subsidiary networks: The current culmination of globalization trends is a world marked by real-time connectivity among the subsidiaries of an MNE. Subsidiaries around the world can exchange information freely through communication networks. Moreover, there are an astounding number of companies, including their affiliates, which engage in international business. Skills, ideas, and technologies can be created anywhere within an MNE's global network of subsidiaries. An increasingly vital task for managers, then, is to coordinate the company's value chain so that it can leverage the competencies developed within any subsidiary and apply them wherever they can create value within the firm's global network.

Answer to #5

A

Answer to #6

Configuration is the way that managers arrange the activities of the value chain. MNEs greatly improve their competitiveness and performance by configuring value activities to capture potential location economiesnamely, the economies that arise from performing a value creation activity in the optimal location for that activity, given prevailing economic, political, and cultural conditions. Therefore, several conditions shape how managers configure value chains worldwide, most notably, cost factors, cluster effects, logistics, digitization, economies of scale, and business environments.
a. Differences in cost factors, such as wage rates, worker productivity, inflation rates, and government regulations, create significant variations in production costs from country to country.
b. The cluster effect is when a particular industry gradually clusters more and more related value creation effects in a specific location. Each economic cluster creates unique location advantages that offer firms in that locale access to specialized resources that can dramatically improve the potential for innovation.
c. Logistics is how companies obtain, produce, and exchange material and services in the proper place and in proper quantities for the proper value activity.
d. Degree of digitization, or the degree to which an analog product can be converted into a string of zeros and ones, influences how a company configures its value chain.
e. An economy of scale refers to the reductions in unit cost achieved by producing a large volume of a product. Generally, economies of scale occur in industries with high capital costs in which those costs can be distributed across a large number of units of production, thereby resulting in lower per-unit costs.
f. The business environment is influenced by government policies, and these policies can make a country more or less attractive for an MNE.

Oh god, I was lost before coming here. Thanksss

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