A nonequity strategic alliance exists when:
A) two firms join together to create a new company.
B) two or more firms have a contractual relationship to share resources and capabilities.
C) two partners in an alliance own unequal shares in the combined entity.
D) the partners agree to sell bonds instead of stock in order to finance a new venture.

Question

Quizplus · Accepted Answer

A nonequity strategic alliance is a contract between two or more firms where they agree to share resources and capabilities, without forming a new company or merging their ownership in any way. This type of alliance is based on collaboration and mutual benefit, rather than on sharing profits or risks. Examples include joint marketing agreements, distribution partnerships, technology licensing, and research and development collaborations. Nonequity alliances are often used by firms to access new markets, enhance their product offerings, reduce costs, and gain competitive advantages.

A Nonequity Strategic Alliance Exists When