Entering into Strategic Alliances and Collaborative Partnerships Can Be Competitively

question 17

Multiple Choice

Entering into strategic alliances and collaborative partnerships can be competitively valuable because

• A)working closely with outsiders is essential in developing new technologies and new products in virtually every industry.
• B)cooperative arrangements with other companies are very helpful in racing against rivals to build a strong global presence and/or racing to seize opportunities on the frontiers of advancing technology.
• C)they represent highly effective ways to achieve low-cost leadership and capture first-mover advantages.
• D)they are a powerful way for companies to build loyalty and goodwill among customers with diverse needs and expectations.
• E)they are quite effective in helping a company transfer the risks of threatening external developments to other companies.

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Definitions:

Interest

The cost of borrowing money or the return on investment for savings and investments, typically expressed as an annual percentage rate.

Risk Averse

Describing individuals or entities that prefer to avoid risk and would rather choose an alternative with a more certain but possibly lower return, than an option with a higher but uncertain return.

Utility Function

A mathematical representation that relates an individual’s consumption bundle to the level of satisfaction or utility derived from it.

Marginal Utility

The additional satisfaction or utility gained from consuming or using one more unit of a good or service.