Strategic Alliance

By : Sandeep Sharma

Apeejay Institute of Technology

Greater noida

AllianceThe 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 allianceA 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 alliancePartners 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

Partnerships between firms

are combined to pursuemutual interests toare combined to pursuemutual interests to

DevelopDevelop

ManufactureManufacture

DistributeDistribute

GoodsGoods

ServicesServices

Firm AFirm AFirm BFirm B

where theirwhere their

Core CompetenciesCore Competencies

CapabilitiesCapabilitiesResourcesResources

Strategic AlliancesStrategic Alliances

Reasons for Alliances Slow Cycle

Market

Gain access to a restricted market

Establish franchise in a new market

Standard Cycle

Market

Gain market powerGain access to complementary resources

Meet competitive challenge

Pool resources for large projectsLearn new business techniques

Fast Cycle

Market

Fast Cycle

MarketMaintain market leadershipMaintain market leadershipForm an industry technology standardForm an industry technology standard

Share risky R&D expensesShare risky R&D expenses

Increase speed of product, service or market entryIncrease speed of product, service or market entry

Example: Dow Corning from Dow Chemical and Corning Inc.

Example: Chrysler and Mitsubishi Automotive

Example: Chrysler’s supplier network

Types of Strategic AlliancesTypes of Strategic Alliances

Independent firm is created by the joining assets from two other firms where each contributes 50% of the total

Joint Venture

Partnership where the two partners do not own equal shares

Equity Strategic Alliance

Contract is given to supply, produce or distribute a firm’s goods or services (without equity sharing)

Non-Equity Strategic AllianceNon-Equity Strategic Alliance

Types of Strategic AlliancesTypes of 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

Global Strategic Alliances

Few Strategic Alliances

HeroHonda

Reliance and SamsungReliance and Aaj Tak

MarutiSuzuki Ltd.

Microsoft and Nokia