Drew's Cafe Inc. and Cuppa Corp., two local coffee chains, combine resources to enter the global market. They retain their individual ownership; however, they agree to share production facilities and manpower, and they also decide to market their products through combined promotional tools. The arrangement made by the two retail chains to combine resources and collaborate for a common objective refers to a _________.

Question

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The arrangement made by Drew's Cafe Inc. and Cuppa Corp. to combine resources and collaborate for a common objective is a strategic alliance. A strategic alliance is a cooperative agreement between two or more firms to work together to achieve a common goal. In this case, Drew's Cafe Inc. and Cuppa Corp. are entering into a strategic alliance to enter the global market by sharing production facilities, manpower, and marketing their products through combined promotional tools while retaining their individual ownership.