Strategic alliances have three major advantages.These are (1)they may facilitate trade into a foreign market, (2)allow firms to share the fixed costs and develop new products or processes,and (3):

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Strategic alliances are formed to bring together the complementary skills and assets of the participants. This is the primary advantage and is essential for the alliance to be successful. Firms can combine their resources, capabilities, and technology to create a competitive advantage that they may not have been able to develop independently. The other choices are not accurate. B is incorrect because alliances do not give competitors a low-cost route to new technology. C is incorrect because firms must give something away in order to participate in the alliance, but they can gain more from the collaboration. D is incorrect because strategic alliances may facilitate trade into a foreign market, not give competitors a low-cost route to new markets.

Strategic Alliances Have Three Major Advantages