Strategic alliances cannot serve as a substitute for vertical integration because they only create relatively weak, short-term partnerships that allow only one company to obtain the benefits that would have resulted from vertical integration.

Question

Quizplus · Accepted Answer

Strategic alliances can indeed serve as substitutes for vertical integration in many cases. They can form strong, long-term partnerships that allow all involved companies to share the benefits, such as cost reductions, access to new markets, and shared expertise, that might otherwise come from vertical integration. These alliances can vary greatly in strength and duration, depending on the agreement between the companies.

Strategic Alliances Cannot Serve as a Substitute for Vertical Integration