Scientific Solutions, Inc. and BuildIt Corporation occasionally compete with one another in the marketplace. A new business area is emerging that appeals to both firms. However, organizations that will successfully compete in the new business area will need to have a robust laboratory capability as well as an established construction capability. Scientific Solutions has the former, and BuildIt has the latter. Although unusual for two competitors, they negotiate and create a(n)________. Under the terms of this formal agreement, Scientific Solutions and BuildIt jointly pursue their mutual goals.

Question

Quizplus · Accepted Answer

A strategic alliance is the most appropriate choice when two or more companies agree to work together towards a common goal while still maintaining their independence. In this case, Scientific Solutions and BuildIt are combining their respective strengths in order to pursue a new business area. A merger involves two companies coming together to form a single entity, while an acquisition involves one company buying out another. Vertical integration occurs when a company controls multiple stages of the supply chain, and related diversification refers to a company expanding into other related industries. None of these options accurately reflect the situation described in the scenario.