Cooperative Business Strategy (Strategic Alliance)
The role of strategic alliances in shaping corporate and business strategy has grown significantly over the past decade. In almost every industry, alliances are becoming more common as companies realize that they can no longer afford the costs of developing new products or entering new markets on their own. Alliances are especially prevalent in industries or technologies that change rapidly, such as semi conductors, airlines, automobiles, pharmaceuticals, telecommunications, consumer electronics and financial services. On a broader global level, many U.S and Japanese firms in the automobile and electronics industries have teamed up to develop new technologies, even as they compete fiercely to sell their existing products and enter each other’s markets.
A Strategic Alliance is a cooperative agreement between companies who are competitors from different companies. Strategic alliances are linkages between companies designed to achieve an objective faster or more efficiently than if either firm attempted to do so on its own. They serve a vital role in extending and renewing a firm’s sources of competitive advantage because they allow companies to limit certain kinds of risk when entering new terrain.
Ex: In the beverage industry, Nestle works with Coca- Cola to gain access to the other’s distribution channels.
In the computer hardware industry, Toshiba and Samsung have formed a strategic alliance for manufacturing advanced memory chips.
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