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Importance, History & Goals of Strategic alliances

Importance of strategic alliances

Strategic alliances have developed from an option to a necessity in many markets and industries. Variation in markets and requirements leads to an increasing use of strategic alliances. It is of essential importance to integrate strategic alliance management into the overall corporate strategy to advance products and services, enter new markets and leverage technology, research and development.


Nowadays, global companies have many alliances on inland markets as well as global partnerships, sometimes even with competitors, which leads to challenges such as keeping up competition or protecting own interests while managing the alliance. So nowadays managing an alliance focuses on leveraging the differences to create value for the customer, dealing with internal challenges, managing daily competition of the alliance with competitors and risk management which has become a company-wide concern.


Statistics show that the percentage of revenues for the top 1.000 U.S. public corporations generated by strategic alliances increased from 3-6% in the 1990´s up to 40% in the year 2010, which shows the fast changing necessity to align in partnerships. The number of equity-based alliances has dramatically increased in the last couple of years, whereas the number of acquisitions has decreased by 65% since the year 2000. For a statistically examination over 3.000 announced alliances in the USA have been reviewed in the years 1997 to 1999 and results showed that only 25% of these alliances were equity based. In the years 2000 until 2002 this percentage increased up to 62% equity-based alliances among 2.500 newly formed alliances.



Historical development of strategic alliances

Some analysts may say that strategic alliances are a recent phenomenon in our time; in fact collaborations between enterprises are as old as the existence of such enterprises. Examples would be early credit institutions or trade associations like the early Dutch Guilds. There have always been strategic alliances, but in the last couple of decades the focus and reasons for strategic alliances has evolved very quickly:


  • In the 1970s, the focus of strategic alliances was the performance of the product. The partners wanted to attain raw material at the best quality at the lowest price possible, the best technology and improved market penetration, while the focus was always on the product.
  • In the 1980s, strategic alliances aimed at building economies of scale and scope. The involved enterprises tried to consolidate their positions in their respective sectors. During this time the number of strategic alliances increased dramatically. Some of these partnerships lead to great product successes like photocopiers by Canon sold under the brand of Kodak, or the partnership of Toshiba and Motorola whose joining of resources and technology lead to great success with microprocessors.
  • In the 1990s, geographical borders between markets collapsed and new markets were enterable. Higher requirements for the companies lead to the need for constant innovation for competitive advantage. The focus of strategic alliances relocated on the development of capabilities and competencies.



Goals of strategic alliances


  • All-in-one solution
  • Flexibility
  • Acquisition of new customers
  • Add strengths and reduce weaknesses
  • Access to new markets and technologies
  • Common sources
  • Shared risk
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