strategic alliance

(redirected from Strategic Alliances)

Strategic alliance

Collaboration between two or more companies designed to achieve some corporate objective. May include international licensing agreements, management contracts, or joint ventures.

Strategic Alliance

Any agreement where two or more companies agree to cooperate with each other to achieve a certain, mutually beneficial goal. However, a strategic alliance is not a merger, and the involved companies remain separate. A common strategic alliance is a joint venture, where the involved companies partner together to conduct a certain project. Other strategic alliances include management contracts and licensing agreements.

strategic alliance

the combining together of the resources and competencies of two or more firms in a particular activity (but who continue to function separately in all other respects). Strategic alliances can be contractually based or ownership based (with each partner putting equity into the business) and can take a number of formats, for example, co-marketing (with one firm undertaking to market the product supplied by the other firm); co-production (with one firm undertaking to manufacture a product using components supplied by the other firm); and joint research and development (cross fertilization of ideas).

Strategic alliances can enable firms to obtain access to technologies, know-how, capital and markets to augment their own resources and capabilities. Pooling resources and capabilities in this way enables firms to achieve synergistic effects otherwise unobtainable on an individual basis. International alliances in particular can assist MULTINATIONAL ENTERPRISES to ensure that products reach the market place more quickly and more effectively, especially where products need to be modified to meet local regulations covering product standards and packaging, and the preferences of local customers.

While strategic alliances can yield positive benefits to partners there are some potential drawbacks. Arm's length cooperation agreements need careful planning and nurturing and involve ‘agency’ costs in negotiating, securing and monitoring CONTRACTS; they also require the establishment of mutual trust and commitment. Joint ventures go some way to implementing a stronger link between partners, but problems of joint control of operations may again limit the effectiveness of alliance. See JOINT VENTURE, FOREIGN MARKET SERVICING STRATEGY, EXTERNAL GROWTH, LICENCE.

strategic alliance

a partnership between two or more companies who combine their efforts in a particular business activity while retaining their independence as separate companies. Strategic alliances take two main forms:
  1. contractual agreements in which partners, for example, agree to cooperate to make components or complete products (coproduction), to distribute and market each other's products (co-marketing) and to develop new products (joint research and development). These are referred to as ‘nonequity ventures’;
  2. JOINT VENTURES involving the formation of a subsidiary company that is owned by the ‘parent’ firms, each of which provides a capital investment in the business. These are referred to as ‘equity ventures’.

Strategic alliances can enable firms to obtain access to technologies, know-how, capital and markets to augment their own resources and capabilities. Pooling resources and capabilities in this way enables firms to achieve synergistic effects otherwise unobtainable on an individual basis. International alliances in particular can assist MULTINATIONAL COMPANIES to ensure that products reach the market place more quickly and more effectively, especially where products need to be modified to meet local regulations covering product standards and packaging and the preferences of local customers.

While strategic alliances can yield positive benefits to partners, there are some potential drawbacks. Arm‘s-length cooperation agreements need careful planning and nurturing and involve ‘agency’ costs in negotiating, securing and monitoring CONTRACTS; they also require the establishment of mutual trust and commitment. Joint ventures go some way to implementing a stronger link between partners, but problems of joint control of operations may again limit the effectiveness of the alliance. See EXTERNAL GROWTH, LICENCE, FOREIGN MARKET SERVICE STRATEGY.

References in periodicals archive ?
The objectives are to Create a distinct professional identity for executives and managers of strategic alliances, Set standards of professional performance in the formation and management of strategic alliances, Support the professional development of its members by promoting education, communication and fellowship through
Building strategic alliances has become an invaluable practice for minority- and women-owned firms, regardless of their size or scope of business.
Some insurers are using strategic alliances as a quick and profitable alternative to mergers and acquisitions.
From joint ventures to strategic alliances, small business find that there is strength in numbers.
I think having access to new technologies, and to new partners by setting up strategic alliances, is a cost-effective way to do that.
Sometimes strategic alliances are embodied in a new organization, such as a joint venture.
Berlage structured, negotiated and helped implement numerous transactions, including product and company acquisitions, divestments, in-licenses and out-licenses, strategic alliances, joint ventures, research and development agreements, marketing and distribution arrangements, manufacturing and supply agreements, clinical research agreements and a variety of other business arrangements.
Recipients of the Individual Alliance Excellence Award are judged by the ASAP Awards Committee consisting of leading academics, analysts, thought leaders and consultants who have extensive experience with and insight into strategic alliances.
BOSTON -- Strategic Alliances are an indispensable tool in the Global Economy to bring new products to market, drive innovation and penetrate markets around the world.
Pharmaceutical Strategic Alliances' provides in-depth case studies focusing on deal outcomes, and highlights key success factors in agreeing and executing strategic alliances.
to identify and potentially transfer proprietary technologies that will be synergistic with its core business," said Eric Jenkins, Vice President of Strategic Alliances for UTEK Corporation.
Bhatia will be responsible for managing and growing the company's global strategic alliances initiative.

Full browser ?