Strategic alliance

Strategic alliance is an durable alliance between partners or competitors. It is defined as the relationship between the companies, whose aim is to realize a common goal of both partners. It is created when there is weak competition and a strong partnership between companies.

Businesses are creating alliances to improve business management by coordinating powers in order to: achieve a better competitive position on market by the partners and to make a merger or acquisition of selected areas of activity.

Strategic alliances as opposed to mergers and acquisitions, is characterized by preservation of autonomy among the participants and the ease of withdrawal from the system. Its range usually include many market segments, and in extreme cases the whole market.

Strategic alliances is a flexible form of cooperative strategy. Common strategic objectives are: to enter the new market, develop and implement new technologies and acquisition of another company, etc.

The conditions necessary for alliances to sustain:

• Compliance of strategic goals of both partners,
• Compliance of culture and communication
• Tangible benefits for each participant,
• Compliance of legal and administrative conditions,
• Highly skilled managerial staff.

The effectiveness of strategic alliances

Strategic alliances allow:

• the division of investment,
• reduce Risk,
• increase efficiency,
• leads to the emergence of new skills as a synergistic effect.
• reduce competition and reinforce both parties.

Objectives

The primary objectives of strategic alliances are: acquisition and internalization of knowledge. The success of the alliance is more likely if managers and their companies enter into such an alliance, "properly equipped" - that is, have the appropriate personal attitudes and organizational habits. The views of managers and how they work and interact, a prerequisite for their success or failure as managers of alliances.

See also:

• Secret company
• Risk management process

Strategic alliance — recommended articles

Business improvement — Subcontractor — Methods of restructuring — Intangible asset — Sustainable competitive advantage — Holding — Personnel strategy — Organizational progress — Transformational outsourcing

References

• Isabella, L. A. (2002). Managing an alliance is nothing like business as usual. Organizational Dynamics, 31(1), 47-59.
• Kumar B.N., Haussmann H., Handworterbuch der internationalen Unternehmenstatigheit, C. H. Besk'she Verlagsbuchhandlung, Munchen, 1992.
• Reuer, J. J., & Arino, A. (2007). Strategic alliance contracts: Dimensions and determinants of contractual complexity. Strategic Management Journal, 28(3), 313-330.
• Whipple, J. M., & Frankel, R. (2000). Strategic alliance success factors. Journal of Supply Chain Management, 36(2), 21-28.

Author: Tomasz Marciniec, Jolanta Szewczyk