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Strategic alliance.docx

Strategic alliance.docx

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Published by Mifta Hul Jannat

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Published by: Mifta Hul Jannat on Jul 09, 2012
Copyright:Attribution Non-commercial


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Strategic alliance
A strategic alliance is a term used todescribe a variety of cooperativeagreements between different firms, suchas shared research, formal joint ventures, orminority equity participation.
Themodern form of strategic alliances isbecoming increasingly popular and hasthree distinguishing characteristics:
 1. They are frequently between firms inindustrialized nations2. The focus is often on creating newproducts and/or technologies ratherthan distributing existing ones3. They are often only created for shortterm durations
Advantages of a strategic alliance
 Technology Exchange
This is a major objective for manystrategic alliances. The reason for this isthat many breakthroughs and majortechnological innovations are based oninterdisciplinary and/or inter-industrialadvances. Because of this, it isincreasingly difficult for a single firm topossess the necessary resources orcapabilities to conduct their owneffective R&D efforts. This is alsoperpetuated by shorter product lifecycles and the need for many companiesto stay competitive through innovation.Some industries that have becomecenters for extensive cooperativeagreements are:
Information technology
Specialty chemicalsGlobal competition
There is a growing perception thatglobal battles between corporations befought between teams of playersaligned in strategic partnerships.
 Strategic alliances will become key toolsfor companies if they want to remaincompetitive in this globalizedenvironment, particularly in industriesthat have dominant leaders, such as cellphone manufactures, where smallercompanies need to ally in order toremain competitive.Industry convergence
As industries converge and thetraditional lines between different

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