Strategic alliances seek to obtain the same benefits found through vertical integration. What is the difference between strategic alliances and vertical integration?

A company that undergoes vertical integration acquires a company that operate in the production process of the same industry is vertical Integration. on the hand Strategic alliance is the agreement between two or more independent companies to cooperate in the manufacturing, development and sale of product.

For example, in a strategic alliance two companies combine their respective resources, and core competencies to generate mutual interest

in manufacturing or distributing of goods and services.

The correct answer is letter "A": Vertical integration seeks to either own the companies that participate in each stage of production or operate completely separately from stage to stage, while strategic alliances work together with companies throughout stages of production.

Explanation:

Vertical integration happens when a corporation buys other companies in the supply chain and manages them. There are two types of vertical integration: backward and forward. Through backward vertical integration, a company buys companies that supply the manufacturing processes inputs. A company owns another company in forward vertical integration to get closer to end-consumers.

A strategic alliance is a business partnership between two or more organizations sharing resources for a common objective. The common goal also includes the research and development of specialized goods.