Which of the following alliances is an equity-based alliance?
A) Strategic investment
B) Licensing
C) Turnkey projects
D) Co-marketing

Question

Which of the following alliances is an equity-based alliance? 
A) Strategic investment 
B) Licensing 
C) Turnkey projects 
D) Co-marketing

Quizplus · Accepted Answer

An equity-based alliance involves one company making a financial investment in another company in exchange for ownership or partial ownership. This is exactly what happens in a strategic investment alliance where one company purchases an equity stake in another company to gain some control over its decision-making process. The other options, licensing and turnkey projects, are typically contractual alliances where one company either grants or receives permission to use or provide its technology, patents, trademarks, or know-how to the other company without transferring ownership. Co-marketing is a promotional alliance where two or more companies collaborate and share marketing costs to promote a product or a service without any equity exchange involved.

Which of the Following Alliances Is an Equity-Based Alliance