Question

Which of the following is a disadvantage of a firm that enters long-term alliances?

A. It may lose the ability to realize economies of scale.

B. It does not have the authority to terminate the alliance if partners fail to perform.

C. It loses the capability to capture the benefits of vertical integration.

D. It may limit its strategic flexibility by the commitments it makes to its alliance partners.

E. It risks losing opportunities to build on its skills and capabilities.

Answer

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