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Strategic Alliance Agreement

In the 1970s, strategic alliances focused on product performance. The partners wanted to obtain the best quality raw materials at the lowest possible price, the best technology and better market penetration, while the focus has always been on the product. While the strategic alliance can be an informal alliance, each member`s responsibilities are clearly defined. The needs and benefits of partner companies will determine how long the coalition will be implemented. Forming a strategic alliance is a process that usually involves a few important steps mentioned below:[11][26][27] Once you choose a particular company you want to partner with, it`s time to figure out how to navigate the partnership. You can decide what methods and techniques to use to make the alliance work. An important decision for each organization is to choose the types of information to disclose. Contrary to what is commonly said, full disclosure of sensitive company information is not necessary for a partnership. Each organization can filter out the details it reveals and ensure that the data provided is essential to achieving the common goal. CONSIDERING that companies have many reasons to form a strategic alliance: this phase focuses on establishing a legal and organizational framework for the strategic alliance relationship, agreeing and completing operational plans, the need for key leadership, and creating a risk and reward formula that will encourage both sides to succeed in their relationship.

This phase ends with the signing of the contract. [30] One of the main reasons for the commitment to a strategic alliance is the facilitation of access. Entry into new industries is also a significant threat. The current rivalry in the sector can increase entry difficulties. For example, new players in the aviation industry are slowly arriving. The best strategy for companies to enter the sector is to partner with one of the airline`s historic brands. A strategic partnership with one of these brands will reduce potential risks, such as the early termination of operations. A smart alliance also minimizes the risk that current resources will be mismanaged. Long-term strategic alliances often fall into a hole where they lose their competitive edge.

Like a pack of wolves that, after a long period of time, lose motivation to follow their leader, company employees may lose touch with the Alliance`s original goal. The strength of an alliance depends very much on the common vision. Therefore, everyone needs to know how their role is tied to the overall goal. Whether or not there are changes in methods, techniques and tools, cooperation remains in place if everyone continues to work towards the goal. A strategic alliance is an agreement between two companies to carry out a mutually beneficial project, while each company retains its independence.

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