| Definition |
Strategic Alliances are agreements between firms in which they mutually commit resources to achieve common objectives. Companies may form Strategic Alliances with customers, suppliers or competitors. Through the use of Strategic Alliances, companies can improve competitive positioning gain entry to new markets, supplement critical skills, and share the risk or cost of major development projects. |
| Implementation |
To form a Strategic Alliance, companies should:
- Define their business vision and strategy to understand how an alliance fits their objectives
- Evaluate and select potential partners based on the level of synergy and the ability of the firms to work together
- Develop a working relationship and mutual recognition of opportunities with the prospective partner
- Negotiate and implement a formal agreement that includes systems to monitor performance
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| Purpose |
Strategic Alliances are formed to:
- Reduce costs
- Increase access to new technology
- Inhibit competitors
- Enter new markets
- Reduce cycle time
- Improve quality
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