Alliances for the purpose of diversification are especially valuable if
A) joint ventures can be spun off to allow the firm to concentrate on its core business.
B) the new products created by the alliance are related to the firm's current products.
C) the alliance results in synergy that creates products entirely new to the alliance partners.
D) the alliance creates path dependence in the partners.

Question

Quizplus · Accepted Answer

Alliances for the purpose of diversification are most valuable when the new products created by the alliance are related to the firm's current products. This allows the company to leverage its existing resources and expertise and minimize the risk involved in developing entirely new products.

Alliances for the Purpose of Diversification Are Especially Valuable If