CA Intermediate · Financial Management and Strategic Management · Strategic Choices
Two Indian cement companies agree to share costs of a new logistics platform and a joint R&D facility, but each continues to operate independently and no new entity is formed. Which type of strategic alliance-based approach best describes this arrangement?
The arrangement is a cooperation or strategic alliance without a new entity. The two cement companies share logistics and R&D costs while remaining independent. A merger or acquisition would change ownership or combine the firms, and a divestiture would involve selling a unit.
- AMerger
- BAcquisition
- CCooperation/strategic alliance without a new entityCorrect
- DDivestiture
Explanation
Firms that collaborate on shared activities while staying independent and without creating a merged entity are in a cooperative or strategic alliance arrangement. A merger combines the firms, an acquisition transfers control, and a divestiture is a sale of a unit, none of which occurred here.
Did you get it right without looking?
One question tells you little. A timed set on Strategic Choices shows your real accuracy, how long you take and where you lose marks.
More Strategic Choices questions
- A Bengaluru software services firm has a business unit that holds a low relative market share in a high-growth market and needs heavy cash i…
- Kaveri Foods, a packaged snack company, sells its existing namkeen range only in southern India. It now plans to sell the same products in n…
- Kaveri Auto Components, a Chennai firm, makes brake pads for two-wheelers. It decides to start making seat covers for the same two-wheeler m…
- Kaveri Foods, a packaged snack maker, has a flavoured peanut brand with a very high market share in a market growing at only 2% a year. It g…
- A diversified Indian conglomerate classifies its business units on a matrix of relative market share and industry growth rate. One unit has …
- Tata Motors-like firm 'Veda Autos' has a vehicle line with low market share in a slow-growing market. Management decides to sell the entire …