An organization wants to form a strategic alliance with another firm.The second firm is at the same level along the value chain.It cannot contribute the same financial resources,although it can contribute an extensive knowledge.In order to accommodate these factors,they decide to start a legally independent firm.Which of the following alliances will be best suited for the organization?

Question

Quizplus · Accepted Answer

A joint venture is the best choice in this scenario as the two firms are at the same level along the value chain, and the second firm can contribute extensive knowledge although it cannot contribute the same financial resources. Starting a legally independent firm through a joint venture allows both firms to share resources, knowledge, and risks while maintaining their separate identities. A contractual alliance or distribution agreement may not provide the same level of partnership and involvement that a joint venture can offer, and an equity alliance may not be feasible if the second firm cannot contribute significant financial resources.

An Organization Wants to Form a Strategic Alliance with Another