Definition

Strategic alliances between companies can maximize the potential of a company. Know everything you need to know about them and the importance of strategic partnerships between companies.

What Is it a strategic alliance?

A strategic alliance is an agreement between two or more companies (or organizations) that come together to obtain competitive advantages that by themselves they would not get in the short term without great efforts.

What are the advantages of strategic alliances?

These advantages are product, price, quality, service, customer credit, design, image, information, competitive strategy (which has three generic plans: cost leadership, differentiation, and concentration).

When is a strategic alliance concluded?

  • When you want to update or improve the technology used in production processes (it usually involves a ‘transfer of know-how.
  • you want to make inventor partners (small, medium, or large)
  • When you want to access a new market. Knowledge of the market and the particularities that the partner has in their field remains used.
  • When you seek to minimize investment risks (whether in new products or services or research and development).
  • What type of strategic alliances exists?

There are different types of alliances based on various aspects but have the same objective: strengthening businesses and creating new business opportunities.

Marketing alliances

Its fundamental strategic objective is to increase sales without making new investments or incurring indirect costs. Using a company’s distribution system, or entering other markets. For example, when you enter another country through a chain of stores.

What type of strategic alliances exists?

There are different types of alliances based on various aspects but have the same objective: strengthening businesses and creating new business opportunities.

Marketing

Alliances for technology development and product development

Technological development is risky and expensive. In this sense, joint ventures and capital contribution companies are efficient.

These alliances reduce the risk of developing new technologies and applying them to the development of products or processes. And also, In a product development company, it is common to have two or three companies that share the rights to sell the product.

Non-profit alliances

Juan Algar, an expert in social innovation, explains that companies have different motivations. To integrate philanthropy and social responsibility activities into their strategies and operations, adding that. And also,  if they remain performed well, they can positively impact

The expert cites the case of American Express, a financial company associated for three years with Share Our Strength, an NGO that fights against poverty. And also,  alliance was a campaign against hunger: Amex would give Share Our Strength 3 cents for every transaction made over Christmas. And also, Profits Generated $ 21 million for the cause and helped improve the company’s image and. More importantly, increase the use of Amex cards.

For these alliances between private initiatives and NGOs, the expert points out an important aspect: “Those who have enough vision will survive, which implies giving up the leadership and generosity of invention that long-term collaborations require.

Also Read: What Is Intelligent Cell Phone?

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