Discussion 05: International Strategic Alliances

Discussion 05: International Strategic AlliancesAn international strategic alliance is an arrangement in which two independent organizations cooperate in specific areas to develop distinct competitive advantage for both organisations by pooling resources for a common business objective. Cooperation can be in areas such as research and development, innovation and technology sharing or marketing. A Joint venture alliance allows entities to pool resources in the new entity while equity alliance allows one entity to acquire equity stake in other and non – Equity alliance involves sharing of core competencies with no new entity being created or equity participation.International strategic alliances in technology can help a business exploit technologies developed by another company to improve the acceptability of its products in the international market or to meet new demand in the international market. Technology and innovation sharing alliances can be used to gain access to proprietary technology owned by other companies without buying into that technology. The technology is used to develop mutually beneficial products and extend product lines. Some disadvantages of innovation and technology sharing alliances are potential loss of proprietary information through exchange of expertise and information. Another disadvantage is the danger of becoming dependent on foreign owned technology CITATION