COMMERCE 4SA3 : Chapter 13.docx

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Strategic alliances are business arrangements where two or more firms choose to cooperate for their mutual benefit. The firms may agree to pool r&d activities, marketing expertise, and/or managerial talent. Each participant is motivated to promote its own self but has determined that cooperation is the best way to achieve its goals. A strategic alliance can be in the form of a joint-venture or a non-joint venture. A joint-venture is when two or more firms join together to create a new business entity that is legally separate and distinct from its parents. This approach is often preferred because independent managers focus on what is best for the jv. Non joint-venture strategic alliances are often formed to help a firm overcome an issue facing it in the short term. Often formed for a specific purpose that may have a natural ending.

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