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Advantages And Disadvantages Of Strategic Alliance Pdf

advantages and disadvantages of strategic alliance pdf

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The philosophy behind the cooperative strategy is that a company cannot always stand or go alone. Reasonably, it can make stronger its effectiveness through bring into being partnerships with other companies.

The Advantages and Disadvantages of Business-Charity Partnerships by Jack Fox-Williams

A strategic alliance also see strategic partnership is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations. The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer access to knowledge and expertise , economic specialization , [1] shared expenses and shared risk. A strategic alliance will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship. Typically, two companies form a strategic alliance when each possesses one or more business assets or have expertise that will help the other by enhancing their businesses. Strategic alliances can develop in outsourcing relationships where the parties desire to achieve long-term win-win benefits and innovation based on mutually desired outcomes. This form of cooperation lies between mergers and acquisitions and organic growth.

Strategic Alliances in Banking

Alliances between companies, whether they are from different parts of the world or different ends of the supply chain, are a fact of life in business today. Some alliances are no more than fleeting encounters, lasting only as long as it takes one partner to establish a beachhead in a new market. Whatever the duration and objectives of business alliances, being a good partner has become a key corporate asset. In the global economy, a well-developed ability to create and sustain fruitful collaborations gives companies a significant competitive leg up. Yet, too often, top executives devote more time to screening potential partners in financial terms than to managing the partnership in human terms. They worry more about controlling the relationship than about nurturing it. Three years ago, I began a worldwide quest for lessons about productive partnerships, especially but not exclusively those intercompany relationships that spanned two or more countries and cultures.

To browse Academia. Skip to main content. By using our site, you agree to our collection of information through the use of cookies. To learn more, view our Privacy Policy. Log In Sign Up. Download Free PDF. Jack Fox-Williams.

If you've reached a point that you feel you've gotten about as far as you can on your own in charting your export strategy , it's a good time to consider joining forces with another company of similar size and market presence that is located in a foreign country where you are already doing business, or would like to. That's a global strategic alliance. Before you can move ahead though, it's important to understand exactly how a global strategic alliance works, and what it can and cannot do for you. Alliances are typically formed between two or more corporations, each based in their home country, for a specified period of time. Their purpose is to share in the ownership of a newly formed venture and maximize competitive advantages in their combined territories. The cost of a global strategic alliance is usually shared equitably among the corporations involved and is generally the least expensive way for all concerned to form a partnership. An acquisition, on the other hand, offers a faster start in exploiting an overseas market but tends to be a much more expensive undertaking for the acquiring company—one that is likely to be well out of the reach of a solo operator.


List of the Disadvantages of Global Strategic Alliances. It may encourage good employees to cross over. It can create conflicts in ownership claims. It may stick one company with a majority of the expenses. It can lead to discrepancies of interpretation. It can create a clash of cultures.


Strategic alliance

Alliances and partnerships are a key staple in business strategies for organizations large and small. But while many partnerships begin with big visions and aspirations, not all alliances turn out to be strategic. In the last few months, I have seen various new alliances being formed among top companies of the world. Alliances are business relationships. Each alliance is a joint venture where two or more entities work together to achieve a shared goal while remaining separate and independent.

Strategic Alliances Advantages And Disadvantages Essay

Hence, forming a joint venture with another company is seen as a plausible solution. It is not like a partnership agreement because this has a definite end to it as it focuses on a single project or undertaking. It does pose a great sense of benefit for both companies, but it also comes with its share of side effects as well. That is what we are hoping to bring to light in this article. Starting a joint venture provides the opportunity to gain new insights and expertise. Think about it; the market is now way easier for you to understand given the short-term partnership that you have forged. Forming a joint venture will give you access to better resources, such as specialized staff and technology.

References Investopedia Strategic alliances. The role of strategic alliances in high-technology new product development.


The main advantages of Strategic Alliances between companies are: A strategic alliance allows a business to get competitive advantage through access to a.


Defines the concept of strategic alliances as well as outlining the potential benefits and disadvantages of entering into such relationships. This will facilitate critical reviews of the nature and type of relationship that best satisfies their individual needs. Strategic alliances are a means of rationalizing business operations and improving the overall competitive position of a company and are important because of the sheer speed and dynamism of technological change which has opened up a wide range of new activity areas. Banking firms, however, experienced difficulty in defining the type of relationship that best suits their needs. In particular parties have difficulty in distinguishing strategic alliances from other forms of organizational relationships.

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Global strategic alliances offer incredible new opportunities for businesses of any size. Thanks to the availability of communication and information-sharing resources, a startup can form the same quality of alliances globally as a large corporation. Businesses are looking to form these alliances with one another more than any other type of relationship. In , for example, there were 11 major global strategic alliances that were formed, including one between MasterCard and Apple Pay.

Strategic Alliance: What is it, Types, Benefits & Why You Need it.

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Collaborative Advantage: The Art of Alliances

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3 Comments

  1. Astrid L.

    26.04.2021 at 15:54
    Reply

    As any process, it has its advantages and its disadvantages, and it takes a lot of work, from each partner, in order to make the alliance complete its goals.

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