Question

Strategic alliances are more likely to be long-lasting when they involve

a. partners based in countries with distinctly different cultures and consumer buying habits and preferences.
b. partners that respectively have considerable resource weaknesses in the marketplace.
c. joining forces in R&D to develop new technologies cheaper than a company could develop the technology on its own.
d. partners that are not only experienced with strategic alliances but who also routinely enter into collaborative agreements with firms in peripheral industries.
e. collaboration with suppliers or distribution allies or when both parties conclude that continued collaboration is in their mutual interests.

Answer 1

The correct answer is letter E

Strategic alliance is the formal relationship between two or more companies that seek to achieve a set of objectives previously agreed, however, maintaining themselves as independent companies.

A strategic alliance is an agreement between two companies to undertake a mutually beneficial project, while each maintains its independence. The contract is less complex and less binding than a Joint Venture, in which two companies pool resources to create a separate business entity. A company can enter into a strategic alliance to expand into a new market, improve its product line or develop an advantage over a competitor. The agreement allows two companies to work towards a common goal that will benefit both.