Final answer:
A company may pursue a diversifying strategic alliance to enter new markets, achieve economies of scope, maintain control over resource sharing, and be ambidextrous in satisfying multiple needs such as risk sharing and leveraging complementary skills.
Step-by-step explanation:
A company might be motivated to pursue a diversifying strategic alliance for several reasons. Such alliances can enable a company to enter a new market, which can lead to increased revenues and more diversified income streams. Moreover, forming strategic alliances can help a company achieve economies of scope, which arise when a company can use its existing resources or capabilities to produce different kinds of products or services effectively.
Additionally, strategic alliances can help a company maintain control over resource sharing. This can be crucial when companies want to collaborate without fully merging their assets or losing their individual corporate identities. Moreover, strategic alliances can be ambidextrous, allowing companies to satisfy multiple needs simultaneously, such as sharing expertise and technology or jointly developing new products. Lastly, a conglomerate merger is an example of a diversifying strategy, where a firm acquires businesses in unrelated markets to protect itself through diversification.
The desire to share responsibility and risk is another factor driving companies toward strategic alliances. By joining forces with one or more partners, companies can mitigate the risks associated with new ventures and capitalize on their partner's complementary skills. This shared approach to management and decision-making can often lead to synergies that benefit all parties involved.