Discuss When Firms Go It Alone and Identify Three Conditions

question 60

Essay

Discuss when firms go it alone and identify three conditions under which alliances will be preferred to going it alone and when going it alone is not an attractive substitute for an alliance.

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Definitions:

Near Monopolies

Near monopolies refer to markets where one or a few companies dominate, significantly limiting competition.

Licenses

Legal permits granted by an authority, allowing individuals or companies to carry out certain activities or businesses that would otherwise be unlawful.

Economies of Scale

The cost advantage achieved by an enterprise when production becomes efficient, as costs can be spread over a larger amount of goods.

Market Demand

The total quantity of a good or service that all consumers are willing and able to purchase at various prices during a given period.