SEVI 30103 Exam #3 QUESTIONS WITH VERIFIED
ACCURATE ANSWERS
What is the Build-Borrow-Buy framework, and what are its implications for acquiring
resources? - Answers - Build → when you internally develop and offers control however
it is slow and costly
Borrow → strategic alliances that offer access to tradable resources and speed and
shared costs but less control
Buy → mergers and acquisitions, acquires resources quickly when integration is critical,
but it is expensive and complex
Firms assess relevance, tradability, closeness to balance speed, cost, and risk,
ensuring strategic alignment to decide which to do
Why did Lyft form alliances with GM and Waymo, and what benefits did each party
gain? - Answers - Building : Pros → control and tailored solutions; Cons → slow, costly,
uncertain
Borrowing : Pros → quick access, cost sharing, expertise via alliances ; Cons →
conflicts, knowledge leaks, high failure rates (30-70%)
Buying : Pros → immediate resources, market power, synergies; Cons → high costs,
integration issues, 80% failure rate due to overpayment or managerial issues
What are the benefits and risks of the Build, Borrow, and Buy strategies? - Answers -
Building : Pros → control and tailored solutions; Cons → slow, costly, uncertain
Borrowing : Pros → quick access, cost sharing, expertise via alliances ; Cons →
conflicts, knowledge leaks, high failure rates (30-70%)
Buying : Pros → immediate resources, market power, synergies; Cons → high costs,
integration issues, 80% failure rate due to overpayment or managerial issues
What are strategic alliances, and why do firms enter them? - Answers - Strategic
alliances are cooperative agreements where firms share knowledge, resources, and
capabilities to grow as a business. Firms enter into strategic alliances to strengthen their
competitive position, enter new markets, hedge against uncertainty, and access new
skills and assets. They are also fast and less costly then internal development
How do non-equity alliances, equity alliances, and joint ventures differ? - Answers - Non
equity alliances → contracts, low commitment, share explicit knowledge
Equity alliances → one partner takes a partial ownership stake in the other firm, strong
commitment, sharing tacit/explicit knowledge
Joint venture → standalone jointly owned both both firms, high integration and shared
governance, collaboration
What is tacit knowledge, and how does it create value in equity alliances? - Answers -
Tacit knowledge is unwritten intuitive knowledge gained through work and personal
ACCURATE ANSWERS
What is the Build-Borrow-Buy framework, and what are its implications for acquiring
resources? - Answers - Build → when you internally develop and offers control however
it is slow and costly
Borrow → strategic alliances that offer access to tradable resources and speed and
shared costs but less control
Buy → mergers and acquisitions, acquires resources quickly when integration is critical,
but it is expensive and complex
Firms assess relevance, tradability, closeness to balance speed, cost, and risk,
ensuring strategic alignment to decide which to do
Why did Lyft form alliances with GM and Waymo, and what benefits did each party
gain? - Answers - Building : Pros → control and tailored solutions; Cons → slow, costly,
uncertain
Borrowing : Pros → quick access, cost sharing, expertise via alliances ; Cons →
conflicts, knowledge leaks, high failure rates (30-70%)
Buying : Pros → immediate resources, market power, synergies; Cons → high costs,
integration issues, 80% failure rate due to overpayment or managerial issues
What are the benefits and risks of the Build, Borrow, and Buy strategies? - Answers -
Building : Pros → control and tailored solutions; Cons → slow, costly, uncertain
Borrowing : Pros → quick access, cost sharing, expertise via alliances ; Cons →
conflicts, knowledge leaks, high failure rates (30-70%)
Buying : Pros → immediate resources, market power, synergies; Cons → high costs,
integration issues, 80% failure rate due to overpayment or managerial issues
What are strategic alliances, and why do firms enter them? - Answers - Strategic
alliances are cooperative agreements where firms share knowledge, resources, and
capabilities to grow as a business. Firms enter into strategic alliances to strengthen their
competitive position, enter new markets, hedge against uncertainty, and access new
skills and assets. They are also fast and less costly then internal development
How do non-equity alliances, equity alliances, and joint ventures differ? - Answers - Non
equity alliances → contracts, low commitment, share explicit knowledge
Equity alliances → one partner takes a partial ownership stake in the other firm, strong
commitment, sharing tacit/explicit knowledge
Joint venture → standalone jointly owned both both firms, high integration and shared
governance, collaboration
What is tacit knowledge, and how does it create value in equity alliances? - Answers -
Tacit knowledge is unwritten intuitive knowledge gained through work and personal
