The strategic alliance is a cooperation form that is not commonly defined in the academic

literature. Frequently, the term is used as a synonym for a coalition, strategic partnership or
even joint venture which makes a clear demarcation very difficult. In general, a strategic
alliance is defined as a relationship between independent companies which pursue the same
objectives by making joint strategic decisions about common resource orientations. There are
four essential characteristics that define strategic alliances:

(1) A strategic alliance is the result of the merger of two or more companies which remain
legally independent companies and compete directly or indirectly amongst each other.
(2) An exchange relationship develops between the companies.
(3) The strategic alliance is oriented towards a medium to long term-cooperation and includes
at least one value adding area.
(4) Control and output tasks are split across the companies involved.

Finally, an alliance can be considered as strategic if the reason for the cooperation is to
achieve a long-term oriented goal with a direct influence on the strategic competitive position
of both alliance partners (Kupke, 2009; p. 38; Pausenberger, 1994; pp. 35-36).

Exporting is the marketing and direct sale of domestically produced goods in another country.

Exporting is a traditional and well-established method of reaching foreign markets. Since it does

not require that the goods be produced in the target country, no investment in foreign production

facilities is required. Most of the costs associated with exporting take the form of marketing

expenses.

While relatively low risk, exporting entails substantial costs and limited control. Exporters

typically have little control over the marketing and distribution of their products, face high

transportation charges and possible tariffs, and must pay distributors for a variety of services.

What is more, exporting does not give a company firsthand experience in staking out a

competitive position abroad, and it makes it difficult to customize products and services to local

tastes and preferences.

Strategic alliances and joint ventures have become increasingly popular in recent years. They

allow companies to share the risks and resources required to enter international markets. And

although returns also may have to be shared, they give a company a degree of flexibility not

afforded by going it alone through direct investment.

There are several motivations for companies to consider a partnership as they expand globally,

including (a) facilitating market entry, (b) risk and reward sharing, (c) technology sharing, (d)
joint product development, and (e) conforming to government regulations. Other benefits

include political connections and distribution channel access that may depend on relationships.

A joint venture (JV) describes the cooperation between two companies from different countries or
economic territories. Therefore, a company searches for a JV partner in the foreign country to create a
new joint venture, whereby ownership, control and management are shared between the partners.
Setting up a JV can have several advantages, for example import restrictions or import bans can be
avoided, a faster market entrance in the foreign market is possible and the already existing market
knowledge and business contacts from the JV partner can be helpful. Furthermore, the capital
requirement as well as the business risk is divided among the joint venture partners. If two companies
establish a JV, the domestic partner company often hopes for a learning process and technology
transfer, whereas the foreign company is aiming for a faster market entrance, market knowledge and
access to the network of the JV partner. To minimise the risk of choosing the wrong JV partner, a
company has the option to conduct extensive background checks on its possible new partner. In the
course of this process financial, cultural, fiscal, legal, strategic and personnel factors will be evaluated
in the hope of being able to establish a complete analysis of the potential risks involved in the venture