Question

Riytiz Corp. and Tenkriz Corp. are two industrial developers. They plan to combine their funds, finances, risks, and expertise to build the Opobip Bridge. This bridge is said to connect two states that are not connected by a highway. In this scenario, the venture between Riytiz Corp. and Tenkriz Corp. would be called a:

Answer 1

Answer:

Strategic alliance.

Explanation:

Is an agreement between two entities to pool their resources for achieving a common business goal. Are co-operative relationships between two or more independent organisations, designed to achieve mutually beneficial goals for as long as is economically viable.

There are two types of strategic alliance, horizontal and vertical. The ways to enter in a strategic alliance are a joint venture, an equity participation or a non equity.

The reasons for a strategic alliance could be:

- Gaining an access to a restricted market.

- Ganing a foothold in new market.

- Increase the speed of development of new products.

- Maintain leadership position.

- Leverage upon the benefits like economies of scale, lower costs.

- Gain market power.

- Gain access to know-how.

- Pool resources to fund large capital intensive projects.

- Gaining competitive advantage against competitors.