5. strategic alliances.
- companies who are willing to cooperate with one another do not want to go so far as to create a separate jointly owned company. A relationship whereby 2 or more companies cooperate (but do not form a separate legal entity as a joint venture) to achieve the strategic goals of each company.
- contractual agreement usually between potential or actual competitors to share technology, cooperate on research and development (R&D) projects between two or more companies (usually between competitors with a common business objectives).
- sa is formed to block competitors.
- advantages: share cost (and associated risks) and resources. Access competitor’s’ specific strengths. Facilitate entry into a foreign market.
- disadvantages: give competitors a low- cost way to access new technology and markets. Potential more intense competition.Conflicts of interest.