The high entry barriers in a given industry:
A)Preclude any alliance activity.
B)May result in alliances that can lower cost and risks to market entry.
C) Prevent network ties from reaching an alliance level.
D) Tend to dilute the individual strength of any firm in the alliance.

Question

The high entry barriers in a given industry:
A)​Preclude any alliance activity.
B)​May result in alliances that can lower cost and risks to market entry.
C) ​Prevent network ties from reaching an alliance level.
D) ​Tend to dilute the individual strength of any firm in the alliance.

Quizplus · Accepted Answer

High entry barriers make it difficult and risky for new players to enter the market, which may result in alliances being formed to share the cost and risks of market entry. Therefore, option B is the most appropriate choice. Option A is incorrect because high entry barriers do not preclude alliance activity. Option C is incorrect because it is not necessarily true that high entry barriers prevent network ties from reaching an alliance level. Option D is incorrect because high entry barriers do not necessarily dilute the individual strength of a firm in an alliance.

The High Entry Barriers in a Given Industry