Which of the Following Is a Disadvantage of a Strategic

question 25

Multiple Choice

Which of the following is a disadvantage of a strategic alliance?

• A)Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market.
• B)As a result of strategic alliance,fixed costs of developing new products tend to increase.
• C)Strategic alliance gives competitors a low-cost route to new technology and markets.
• D)Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
• E)Strategic alliance always leads to a loss to either of the firms involved.

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Definitions:

Product Differentiation

Product differentiation is the process of distinguishing a product or service from similar offerings in the market to make it more attractive to a particular target market.

Market Power

The ability of a firm or group of firms to control prices or output in a market, often leading to reduced competition.

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and opportunity costs.