With the growth and expansion of global corporations and the inherent demands of global sourcing, strategic alliances have become an essential business practice for most transnational companies.
What are Strategic Alliances?
Strategic alliances are basically partnerships of two or more businesses that work together to achieve mutually beneficial goals. These partnerships are formed to establish and maintain long-term market control over competitors. Alliances allow partners to share risk, resources, acquire learning and obtain access to key markets.
Four Motivations for Strategic Alliances
There are four primary motivations for companies to create strategic alliances.
The first motivation is to pool resources to develop new business products and services.
The second motivation is to minimize risk by sharing costs with a strategic partner.
The third motivation is to set up a learning environment with your team so that you can learn and develop by working with the other members of the alliance. Shared knowledge is a powerful motivator for companies to create strategic alliances.
The fourth motivation is to create a market advantage vis-a-vie alliances of business partnerships that might otherwise be competitors in the marketplace.
Elaine Allan, BA, MBA
Technology & Business Blogger
Vancouver, BC, Canada