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Strategic Alliances in Business

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Strategic Alliances in Business
Discuss the advantages and disadvantages of strategic alliances. Find examples of strategic alliances both working and not working for parties involved and explain why?

Strategic alliances can contribute to the success of a business and are beneficial when maintained with efficient management. As defined in Global Business Today the term ‘strategic alliances’ refers to a “cooperative agreement between potential or actual competitors for the benefit of all companies concerned” (Hill, et al., 2011). The overall concept of a strategic alliance is that it is a relationship between two companies which allows them to create more value than they can on their own. Strategic alliances are becoming increasingly important to the overall strategy of companies as they can generate significant competitive advantage when they are used effectively. Strategic alliances can occur through the form of formal joint ventures or short term contractual agreements where companies agree to cooperate on particular tasks such as developing a new product. Strategic alliances can also be informal, for example a company may just seek to use the expertise of a similar company or government agency to strengthen the businesses own capacities. These alliances can occur with counterpart companies, government agencies, publishers, association management companies, universities, or other for-profit entities. (Hynes & Diane, 2008)

In recent years the changes to economic conditions and fierce competition has resulted in increasing cooperation amongst companies. In the current economy markets are constantly changing, making it increasingly difficult for one company to stay current on all technologies, resources, competencies, and information needed to be successful in those markets. Strategic alliances provide an option for companies to access new markets, expand geographic reach, obtain new technology, and complement skills and core competencies relatively fast. Strategic alliances are now



Bibliography: Business.Govt.NZ, 2013. Strategic alliances and joint ventures. [Online] Available at: http://www.business.govt.nz/support-and-advice/advice-mentoring/for-exporters/strategic-alliances-and-joint-ventures Chen, H., 2003. Governance structures in strategic alliances: transaction cost versus resource based perspective. Journal of World Business, 38(21), pp. 1-14. Gouvea, R. & Montoya, M., 2013. Brazil & China: Partners or Competitors? Designing Strategic Alliances in the Age of Uncertainty.. Asian Journal of Latin American Studies, 26(1), pp. 1-23. Hill, C., Cronk, T. & Wickramasekera, R., 2011. Global Business Today. 2nd Edition ed. Sydney: McGraw Hill. Holmberg, S. R., 2009. Building Successful Strategic Alliances. [Online] Available at: http://www.entrepreneurship.ethz.ch/education/lectures/Alliance_Advantage/Processes_Holmberg_2009.pdf Hynes, N. & Diane, M., 2008. Capturing strategic alliance outcomes: an analysis of motives, objectives and outcomes.. International Journal of Technology Management, 43(1-3), pp. 194-211. XEROX, F., 2013. Overview. [Online] Available at: http://www.fujixerox.com.au/company/overview.jsp

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