Strategic Alliances

Strategic alliances (SA) are trading partnerships and new business forms that enable participating firms to achieve strategic objectives beyond their existing capabilities by providing for mutual resource exchanges (technologies, skills, or products). SA involves two or more partner firms that: (1) remain legally independent after the alliance is formed; (2) share benefits and managerial control over the performance of the partnership; and (3) make continuing contributions to the partnership (Yoshino and Rangan 1995:5). SA encompass both short-term project-based and long-term equity-based cooperation between firms with varying degrees of vertical integration and interdependence, and/or horizontal synergies. SA combine the assets and capabilities with the liabilities of all partners.