What is a strategic alliance? Posted on 2 February at I must say, I received an interesting set of answers back.
Some of the definitions emphasize the fact that the partners do not create a new legal entity, i. This excludes legal formations like joint ventures from the field of Strategic Alliances.
Others see joint ventures as possible manifestations of Strategic Alliances. Some definitions are given here: Definitions including joint ventures[ edit ] A strategic alliance is an agreement between Strategic alliance or more players to share resources or knowledge, to be beneficial to all parties involved.
It is a Strategic alliance to supplement internal assets, capabilities and activities, with access to needed resources or processes from outside players such as suppliers, customers, competitors, companies in different industries, brand owners, universities, institutes or divisions of government.
This is especially relevant in strategic outsourcing relationships.
To a greater or lesser degree, some alliances result in the virtual integration of the parties through partial equity ownership, through contracts that define rights, roles and responsibilities over a span of time or through the purchase of non-controlling equity interests.
Eventually, many result in integration through acquisition. A strategic alliance is less involved and less permanent than a joint venture, in which two companies typically pool resources to create a separate business entity. In a strategic alliance, each company maintains its autonomy while gaining a new opportunity.
A strategic alliance could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities.
Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further their aims but collaborate while remaining apart and distinct. It cannot be overstated that the achievement of value may come in many forms including new entries to market, speed to market, innovation or new product or process, etc.
Definitions are equally varied. There are seven general areas in which profit can be made from building alliances. That means that the partners in the alliance used to be competitors and work together In order to improve their position in the market and improve market power compared to other competitors.
On the one hand, they can "access tangible resources which are directly exploitable". This includes extending common transportation networks, their warehouse infrastructure and the ability to provide more complex service packages by combining resources.
On the other hand, they can "access intangible resources, which are not directly exploitable". This includes know-how and information and, in turn, innovativeness.
Vertical strategic alliances, which describe the collaboration between a company and its upstream and downstream partners in the Supply Chain, that means a partnership between a company its suppliers and distributors.
Especially suppliers get involved in product design and distribution decisions. An example would be the close relation between car manufacturers and their suppliers.
Intersectional alliances are partnerships where the involved firms are neither connected by a vertical chain, nor work in the same business area, which means that they normally would not get in touch with each other and have totally different markets and know-how.
Joint ventures, in which two or more companies decide to form a new company. This new company is then a separate legal entity. The forming companies invest equity and resources in general, like know-how. These new firms can be formed for a finite time, like for a certain project or for a lasting long-term business relationship, while control, revenues and risks are shared according to their capital contribution.
Equity alliances, which are formed when one company acquires equity stake of another company and vice versa.Canadian Natural Gas and Electricity. ICE is the exclusive trading platform for virtually all natural gas and electricity contracts traded in NGX’s energy markets. Agreement for cooperation among two or more independent firms to work together toward common objectives.
Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further their aims but collaborate while remaining apart and distinct. The Strategic Insurance Agency Alliance (SIAA) is the proven total solution for the independent insurance agent and the leading insurance agency network.
Tesco says it is planning a "strategic alliance" with French retail giant Carrefour, as the two try to use their joint buying power to cut costs and offer lower prices to customers. The two plan a. About Strategic Alliance Mortgage. Founded in , Strategic Alliance Mortgage, LLC (“SAM”) is a company comprised of the top independently owned commercial real estate investment banking firms located throughout the United States.
Alliance Members. The Strategic Alliance is a group of four leading organizations committed to the athletic training profession and to the delivery of quality health care to the public.