International Business & Strategic Alliances

International Business & Strategic Alliances

International Business & Strategic Alliances

International strategic alliance is typically defined as a collaborative arrangement between firms headquartered in different countries. Partnering firms remain legally independent after the formation of alliance and the alliance relationship is relatively enduring. Strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A strategic alliance agreement could help a company develop a more effective process.

Importance/Benifits of Strategic Alliance

Advances in telecommunications, computer technology and transportation have made entry into foreign markets by international firms easier

Risk sharing is another common rationale for undertaking a cooperative arrangement – when a market has just opened up, or when there is much uncertainty and instability in a particular market, sharing risks becomes particularly important

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