Hewlett-Packard licenses some of its intellectual property through strategic alliances. Which of the following is correct about this relationship?
A)This is a joint venture because in licensing arrangements, a new company is created.
B)This is an equity strategic alliance because licensing does not involve the creation of a new company, but does involve an equity commitment.
C)The firms risk charges of collusion because most licensing relationships between competitors involve explicit collusion.
D)This is a nonequity strategic alliance with Hewlett-Packard leveraging its unique capabilities.

Question

Quizplus · Accepted Answer

Licensing is a form of nonequity strategic alliance where a company allows another to use its intellectual property without forming a new company or involving equity commitments.

Hewlett-Packard Licenses Some of Its Intellectual Property Through Strategic Alliances