Question

Define and discuss the three major types of strategic alliances by using examples.

Answer 1

Below are the 3 major types of strategic alliances.

1. Joint venture: joint venture is created when the two parent companies together forms a one more company.    Example: Company A and company B together forms a company C by sharing the thier profits.
2. Equity Strategic Alliance : equity strategic alliances formed when one company buys the equity percentages of other company. Examples: if the company A buys the 40% of the company B share. It is termed as equity startgic alliances.
3. Non equity strategic alliances: in case of non equity strategic alliances, company will not buy the equities of other companies. Rather both the companies makes a contractual agreement for combining both companies resources and capabilities. Examples : company A and Company B makes a agreement to share thier company resources or machinaries.

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