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Strategic Alliances

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Strategic Alliances
A business-level cooperative strategy is a strategy used by firms who collaboratively work together to achieve a shared objective that is focused on creating value to the customer; growth and performance improvement; gain a competitive advantage and earn above average returns by competing in one or more product markets (Hitt, Ireland & Hoskisson, 2013). This is accomplished through a strategic alliance where firms share, exchange and combine resources and capabilities to generate a competitive advantage (Hitt, et al., 2013).
Complementary strategic alliance is the most effective technique when acquiring and sustaining a competitive advantage (South University, 2013). Hitt, Ireland & Hoskisson defines complementary strategic alliances as “business-level alliances in which firms share some of their resources and capabilities in complementary ways for the purpose of creating a competitive advantage” (Hitt, et al., 2013). Complementary strategic alliances are the most effective in creating competitive advantages because it is accomplished through the use of vertical and/or horizontal complimentary strategic alliances. In vertical complementary strategic alliances, firms collaboratively share resources and capabilities from different stages of the value chain to create a competitive advantage to become innovative while adapting to environmental changes. While the horizontal complementary strategic alliance also share resources and capabilities, however these resources and capabilities are shared at the same stage/s of the value chain to create a competitive advantage focused on long-term product development and distribution (Hitt, et al., 2013).
In regards to horizontal strategic alliances, these involve firms that are in competition with each other who form an alliance together to compete against other competitors and although alliances are anti-competitive; anti-trust laws should be a main focus when product/s is sold in multiple markets (Sarkissian, 2013)

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