Question4 Firm X and Firm Y are both in the same industry. The two firms have decided to work together to develop new product. Each firm will contribute time and talent to the product’s development and have agreed to share all costs. This project is an example of a:Select one alternative: merged alliance. strategic alliance. joint venture. takeover project. consolidation. ResetMaximum marks: 0.5 Flag question undefined

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The scenario describes two firms collaborating on a new product, with both contributing time and talent and agreeing to share all costs. This arrangement implies a joint ownership and a defined venture undertaken jointly by the two companies.

Option 1: merged alliance. This term is not standard in corporate strategy literature. While it suggests collaboration, it does not clearly denote a jointly owned venture with shared costs and responsibilities. The lack of a widely recognized definition makes this choice less accurate.

Option 2: strategic alliance. A strategic alliance refers to a cooperation between firms to pursue a set of agreed-upon objectives while remaining independent entities. Although it involves collaboration, it does not necessarily involve sharing all costs or creating a jointly owned project. It can be less formal and not encumbered by joint ownership, which makes this option a weaker fit for the described scenario.

Option 3: joint venture. A joint venture is a business arrangement where two or more parties undertake a specific project or business with shared ownership, risks, and rewards. This aligns with both firms contributing resources and sharing all costs to develop a new product, indicating a distinct, jointly controlled venture.

Option 4: takeover project. A takeover project implies one firm acquiring another or a project aimed at acquiring, which does not accurately describe a cooperative product development effort with shared costs and ownership. It suggests an ownership transfer rather than collaborative development.

Option 5: consolidation. Consolidation generally refers to the combination of two or more entities into a single new entity, which implies a full merger rather than a collaborative project with shared costs. The given description emphasizes ongoing collaboration rather than creating a completely new standalone firm, so this is not the best fit.

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