ITPEC IP October 2019 Question 82
ITPEC IP October 2019 — Question 82 of 100
An alliance can reduce business investment risk because participating companies share resources, costs, capabilities, and exposure. A company can enter a market or develop a product without bearing the full investment alone, although it must still manage coordination and partner-related risks.
Answer (a)
Why not others:
- sharing information with partners can increase rather than inherently reduce leakage risk
- collaboration can expose expertise and may increase brain-drain risk
- additional organizations and transactions do not automatically reduce fraud risk
Key rule: Strategic alliances spread investment burden and combine complementary strengths, but introduce trust, control, and information-sharing risks.
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