Strategic alliances bring enterprises the following benefits:
- Increase in capital for research and product development and yet lower risk (Innovation)
- Decrease in product lead times and life cycles (time pressures)
- Ability to bring together complementary skills and assets that neither company could easily develop on its own
- Access to knowledge and expertise beyond company borders (technology transfer)
- Rapidly achieve scale, critical mass and momentum (Economies of Scale - bigger is better)
- Expansion of channel and international market presence (enter a foreign market)
- Building credibility in the industry and brand awareness
- Providing added value to customers
- Establishing technological standards for the industry that will benefit the firm
Strategic alliances come in all shapes and sizes, and include a wide range of cooperation, from contractual to equity forms.