Question

What is the importance of strategic alliances in international buisness?

Answer 1

Collaborative. Collaborative alliances are common in non-competing companies involves in strategic objectives. The main purpose of this alliances is in the collaboration of activities like joint marketing efforts, entering new market, and developments of new technologies or new product between the companies

Answer 2

In the current scenario, the strategic alliance is becoming very popular. In the business environment these days coal companies are becoming the necessary building blocks to get more effective and efficient market place. This type of cooperative system helps organizations improve goals and objectives through cooperation rather than competition. Given the importance of strategic alliances, it is very important for partners to build effective business relationships that help in achieving cooperative objectives. There can be many problems in the formation of the coalition which can affect further business relations.

This essay is divided into 3 parts. The first part defines the strategic alliance and the steps in their formation. The second part identifies major problems in coalition formation with the help of academic principles and case studies. The third part discusses the importance of choosing a partner and gives examples of successful partner selection.

Strategic Alliance

Strategic alliance is an agreement between two or more companies or companies reaching the objective of common interest. The strategic alliance is a business partnership that enhances the effectiveness of competing strategies of participating firms, by providing them a mutually beneficial business of technologies, skills or products based on them. These associations can be from informal contracts to formal contracts, depending on the length of the contract, in which partners are involved in the transfer of capital, technologies and personnel. The alliance between the partners is basically consist of four essential characteristics:  

• Companies involved in the coalition share common profit, competitive advantage and manage the performance of the work.

• Partners are involved in achieving common objectives by contributing on a regular basis in one or more important areas of the Coalition, for example, technology, product, personnel, etc.

• Trust is another feature that can be developed and developed among partners during the operation of the coalition partner coming from the right partner.