Which of the following is a disadvantage of a strategic alliance?
A. Entering into a strategic alliance makes it difficult for a firm to enter into a foreign market.
B. As a result of strategic alliance, fixed costs of developing new products tend to increase.
C. Strategic alliance gives competitors a low-cost route to new technology and markets.
D. Firms that enter into a strategic alliance with a foreign firm tend to face higher trade barriers.
E. Strategic alliance always leads to a loss to either of the firms involved.
Answer: C. Strategic alliance gives competitors a low-cost route to new technology and markets