Overview of Strategic Alliance

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Strategic alliance Strategic alliances are partnerships which are formed between more than one firm that will see these firms combine their managerial, financial and their technological resources as well as their individual competitive advantages for the sole purpose of pursuing mutual goals. These are often termed as cooperative strategies. There are several categories of strategic alliances in existence (Deresky, 2011). These forms of strategic alliances have their individual merits and demerits. The paper will look at examples of these strategic alliances highlighting on their advantages and disadvantages. Joint ventures are independent entities which are formed jointly and are under the ownership of more than one parent company. These can also be formed between companies that are not in the same country. Its main advantage is the fact that there is equal sharing of the ventures profits, costs, benefits and risks among the partners. Equity strategic alliances involve the formation of a venture where the partners have different ownership in terms of their shares. The main advantage of this alliance is the fact that there is the sharing of risks among the partners. Non-equity strategic alliances are a form of agreements which are based on contracts and not the ownership sharing. The advantage of this form of alliance is the fact that there is information sharing just like any other forms of partnerships. Global strategic alliance involves working partnerships
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