Firm X is considering an alliance with Firm A. Which of the following institution-based consideration is most important to Firm X's decision?
A)High entry barriers discourage our competitors from making similar alliances.
B)The alliance will create an acceptable level of value for us.
C) Local content requirements are minimal.
D) The opportunity to learn from Firm A is significant.

Question

Firm X is considering an alliance with Firm A. Which of the following institution-based consideration is most important to Firm X's decision?
A)​High entry barriers discourage our competitors from making similar alliances.
B)​The alliance will create an acceptable level of value for us.
C) ​Local content requirements are minimal.
D) ​The opportunity to learn from Firm A is significant.

Quizplus · Accepted Answer

Local content requirements are an institution-based consideration as they are regulations imposed by governments that can affect the operations and strategic decisions of firms.

Firm X Is Considering an Alliance with Firm A