In general, firms will prefer a strategic alliance over "going it alone" when the level of transaction-specific investment required to complete an exchange is moderate.

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When the level of transaction-specific investment required to complete an exchange is moderate, firms will prefer a strategic alliance over "going it alone" as it can provide mutual benefits and reduce risks. However, if the investment required is low or high, firms may opt for alternative strategies such as a simple contractual agreement or a merger/acquisition respectively.

In General, Firms Will Prefer a Strategic Alliance Over "Going