how to find a strategic alliance
forming a strategic alliance requires creativity forward thinking and savvy business sense though many strategic alliances are not the same each is rooting in common steps outlined below advantages and disadvantages of a strategic alliancea strategic alliance allows a company to embark on opportunities it may otherwise not have been able to embark upon this includes earning new clients engaging in different markets or selling different products each of these avenues has the potential to increase a company s revenue and profitability strategic alliances are also a way to diversify a company s revenue stream and generate different opportunities to mitigate company wide financial risk risk is also mitigated with the help of the alliance members as each entity may have resources that can be used to solve unique challenges or navigate unfamiliar business scenarios last strategic alliances allow a company to operate differently than it normally would this means using resources it doesn t have this might be physical goods access to markets or labor with specific expertise this may also mean the company can leverage the market presence of another firm to more positively gain public perception about their own company entering into an alliance with a company with a strong public reputation helps create brand trust and recognition of your own entity a strategic alliance is most likely to succeed if there is strong communication this means both parties must continually expend resources to manage the alliance to ensure both sides are in agreement should the transmission of information or strategy fail it will be more difficult for the alliance to succeed though strategic alliances may seem fair and romantic they are often not equally balanced one company will almost always naturally benefit more than the other and there may not be a simple solution to balance the trade there may also develop an unnatural reliance on one side or the other in terms of resources consumed or expertise relied upon just like how a strategic alliance can help boost a company s public image the wrongdoing of an alliance company may do harm one company s reputation may rely on the other though they have no control over how the other company handles itself in public similar difficulty may exist if there are conflicts between the alliance members should there be strategic disagreements resources may be wasted on resolving interpersonal conflicts that would not have existed without the alliance may result in gaining customers especially ones in unfamiliar marketsmay generate additional revenue and increase profitabilitymay diversify a company s revenue streammay reduce operational risk of a company due to the addition of unique assetsmay positively influence the brand and perception of the companymay require more work in collaborating and communicating with larger teamsmay result in one side getting a better deal than the other even if this wasn t what was planned may result in conflict should the alliance members disagree on longer term strategymay negatively influence the brand and perception of the companyexamples of strategic alliancesthe deal between starbucks and barnes noble is a classic example of a strategic alliance starbucks brews the coffee barnes noble stocks the books both companies do what they do best while sharing the costs of space to the benefit of both companies strategic alliances can come in many sizes and forms 