Strategic Alliance

By : Sandeep Sharma
Apeejay Institute of Technology
Greater noida
 Alliance
The alliance is a cooperation or
collaboration which aims for a synergy.
The alliance often involves technology
transfer (access to knowledge and
expertise), economic specialization ,
shared expenses and shared risk.
“The whole is greater
than sum of parts”
 Strategic alliance
A Strategic Alliance is a formal
relationship between two or more
parties to pursue a set of agreed
upon goals or to meet a critical
business need while remaining
independent organizations.
 Strategic alliance
Partners may provide the strategic
alliance with resources such as
products, distribution channels,
manufacturing capability, project
funding, capital equipment,
knowledge, expertise, or intellectual
property.
Ex : Star Alliance
Strategic Alliances Firm A
Firm B
Partnerships between
firms
where their
Resources
Capabilities
Core
are combined to pursue Competencies
mutual interests to

Develop
Goods
Manufacture
Distribute Services
 Reasons for Alliances
Slow Cycle Gain access to a restricted market
Market
Establish franchise in a new market

Gain market power

Gain access to complementary resources
Standard
Cycle Meet competitive challenge
Market
Pool resources for large projects
Learn new business techniques

Increase speed of product, service or market entry

Fast
Cycle Market Maintain market leadership
Form an industry technology standard
Share risky R&D expenses
 Types of Strategic Alliances
Joint Venture
Independent firm is created by the joining assets from two
other firms where each contributes 50% of the total
Example: Dow Corning from Dow Chemical and Corning Inc.

Equity Strategic Alliance

Partnership where the two partners do not own equal shares
Example: Chrysler and Mitsubishi Automotive

Non-Equity Strategic Alliance

Contract is given to supply, produce or distribute a firm’s
goods or services (without equity sharing)
Example: Chrysler’s supplier network
 Types of Strategic Alliances
Global Strategic
Alliances
working partnerships between companies (often
more than two) across national boundaries and
increasingly across industries. Sometimes formed
between company and a foreign government, or
among companies and governments
 Few Strategic Alliances

HeroHonda
Reliance and Samsung
Reliance and Aaj Tak
MarutiSuzuki Ltd.
Microsoft and Nokia