Question

What are at least two examples of strategic alliances you could pursue? How can those strategic alliances be used to help grow your business?

Answer 1

A strategic alliance between two or more companies happens when they agreed to help each other for mutual business goals without foregoing their independent identity. Two examples of strategic alliances that one can pursue are –

1. Joint venture: Joint venture is created when an independent company is formed by at least two other companies as part of their future business strategy. Generally joint ventures are created to meet some specific purpose for example; suppose a company is specialized in production and another in marketing and distribution of same product, in that case they can form a joint venture and make a strategic alliance to increase their business from production to distribution. Example of such strategic alliance is in 2011 between Microsoft Corporation and General Electric, as they formed Caradigm; a health IT company.

2. Non-Equity strategic alliance: Non-Equity strategic alliance is a kind of partnership which is created when companies work in collaboration for some common goal and become more efficient, more competitive and well equipped to take the future challenges. Example of such strategic alliance is Boeing cooperative strategy with Boeing, Siemens Form Strategic Alliance for DOD Energy Modernization.

These types of strategic alliances used to help grow the businesses by combining their resources and expertise and creating competitive advantage over others.