Which of the following is not a characteristic of strategic alliances entered into to support related diversification?
A)It is a way for companies to realize some of the benefits of diversification at a lower level of bureaucratic costs.
B)It requires each company to take an equity stake in the new venture.
C)A disadvantage is the risk of losing proprietary know-how to a competitor.
D)It entails investing in a new business or product (including upgrades)instead of an existing one.
E)It allows a company to swap complementary skills.

Question

Quizplus · Accepted Answer

Taking an equity stake in the new venture is not necessarily a characteristic of strategic alliances entered into to support related diversification. While equity stakes can be taken, they are not always required for these alliances. The other characteristics listed, such as realizing benefits of diversification at a lower cost, investing in a new business, and swapping complementary skills, are all commonly associated with strategic alliances for related diversification.

Which of the Following Is Not a Characteristic of Strategic