Question

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Explain the different types of strategic alliances, how they are governed and the conditions under which each type is preferred Describe the different ways value is created in alliances Discuss the two potential dangers of strategic alliances and three ways that firms can protect themselves against these dangers

Answer 1

Following are the strategic alliances and the conditions under which each type is preferred :-

1.Contractual alliance :

Contract determines what each gathering is to do in the union and what each gathering ought to get on the off chance that it satisfies its obligation in the collusion.

It is Preferred When:
- interdependence between partners is low.
- it is anything but difficult to gauge the commitments of each accomplice and compose it in an agreement

2.Equity alliance :

The teaming up firms regularly supplement contracts with value property in their coalition accomplices.

It is Preferred When:

-interdependence between firms is moderate.
-firms carry information or hard to quantify commitments yet each can play out their jobs independently.

3.Joint ventures :

Is a collusion wherein teaming up firms make and together own a legitimately free organization.

It is Preferred When:
-interdependence between firms is very high .
-firms carry information or hard to-gauge commitments that must be joined into a solitary association to organize successfully.

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