Question

Terranova Autos Inc., a large automobile company, made an initial small investment in a start-up company that was developing a solar-powered car. This gave Terranova Autos controlling interests in the start-up company. However, Terranova Autos had no obligations to make continued investments in the experiments of the start-up company. It could invest in small amounts depending on the new product's success at each stage of its development. If the product proved to be successful, Terranova Autos would have the right to buy out the start-up company. This approach to strategic alliance is referred to as__________

Answer 1

real-options perspective

Step-by-step explanation:

Based on the scenario being described within the question it can be said that this approach to strategic alliance is referred to as a real-options perspective. This term refers to the flexibility/freedom of options that the individual/company has to make which allows them to make the best choices and decisions, regarding where and when to make a specific investment that would generate them the best returns.