Strategic Alliances: Associated benefits and challenges

Strategic alliances are the response of the firms to the increasing complexities of business world, high cost of doing business and the globalization. These alliances are the relationships of firms based on cooperation and collaboration where the strategic partners join their skills, expertise and the resources to gain competitive advantage over the others. These alliances are used to obtain advanced technology, access to new markets, producing goods at cheaper rates and developing new products through investment in Research & Development. Despite of the attractiveness and appeal of the alliances about sixty percent alliances fail to achieve their objective because the risks associated with them haven’t been addressed properly. This paper analyzes the benefits that can be reaped by entering into alliances and the challenges that strategic partners may face in this process.