Certified Supply Chain Professional (CSCP) Practice Exam

What is a common reason for alliances to fail?

1. Mature market conditions

2. Shift in strategy

3. Annual reviews of performance

4. Increased competition in the industry

The correct answer is: Shift in strategy

A common reason for alliances to fail is a shift in strategy. When organizations enter into alliances, they typically align their goals, resources, and strategic intentions to achieve mutual benefits. However, if one or both parties experience a change in their strategic direction—whether due to new leadership, market pressures, or internal priorities—it can create misalignment in objectives. This misalignment often undermines the foundational agreements upon which the alliance was built, leading to dissatisfaction, lack of cooperation, and ultimately, the dissolution of the partnership. In this context, while mature market conditions and increased competition can impact an alliance, they do not inherently cause a failure in collaboration unless they induce a strategic shift. Annual reviews of performance, on the other hand, are essential for monitoring the success of an alliance and promoting transparency and adjustment, and thus can actually help sustain a successful partnership.