Suppose Zara has a linked supply chain with Silk City, a fabric supplier. Zara and Silk City use IT to seamlessly exchange data, communicating requirements as well as delivery expectations. The relationship between Zara and Silk City is best described as:

Collaboration Dependence

Co-opetition

Strategic alliance

Competition

Answer: strategic alliance

Explanation: The relationship between both firms is best described as a strategic alliance. When companies or firms enter into an arrangement to undertake projects where they both benefit from, work towards a common goal while retaining their independence, such companies are said to be in a strategic alliance. Some of the reasons for this sort of alliance include: product improvement, expansion into new markets, development of competitive advantages etc.