Which term describes a business arrangement in which two firms cooperate to achieve mutual benefit?

Which term describes a business arrangement in which two firms cooperate to achieve mutual benefit?

• A. Franchising
• B. Joint venture
• C. A business alliance
• D. Licensing

Answer: (C)

A business alliance is a strategic cooperation between two or more firms to gain mutual benefits, while remaining independent entities. This type of arrangement lets partners work together on projects like shared R&D, marketing, or distribution to achieve goals that are harder to reach alone, without creating a new company. It’s flexible and can be informal or formalized through agreements, and it can be short-term or long-term. This fits the scenario best because the emphasis is on cooperation between firms to achieve mutual benefits, rather than creating a separate business structure or transferring rights. A joint venture would involve forming a new, jointly owned company; licensing involves granting rights to use intellectual property; franchising is about adopting an entire business model and brand.

A business alliance is a strategic cooperation between two or more firms to gain mutual benefits, while remaining independent entities. This type of arrangement lets partners work together on projects like shared R&D, marketing, or distribution to achieve goals that are harder to reach alone, without creating a new company. It’s flexible and can be informal or formalized through agreements, and it can be short-term or long-term.

This fits the scenario best because the emphasis is on cooperation between firms to achieve mutual benefits, rather than creating a separate business structure or transferring rights. A joint venture would involve forming a new, jointly owned company; licensing involves granting rights to use intellectual property; franchising is about adopting an entire business model and brand.