A Drawback Involved in Using Cross-Border Strategic Alliances to Enter

question 90

Multiple Choice

A drawback involved in using cross-border strategic alliances to enter new foreign markets is that

• A) the foreign firm will need to make larger investments when compared to entering the new market on its own.
• B) some of the firm's proprietary know-how may be appropriated by the foreign partner.
• C) all potential business risks in the new market will have to be faced alone by the foreign firm.
• D) the shareholder value of the foreign partner will decline drastically.

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Definitions:

Utility

A measure of the satisfaction, usefulness, or value that a consumer receives from consuming a product or service.

Subjective Benefit

The personal value or advantage gained by an individual from a product or service, which varies from person to person.

Course of Action

A plan or strategy intended to accomplish a specific goal or resolve a problem.

Opportunity Cost

The act of abandoning potential benefits available in other choices upon selecting a specific alternative.