Strategic Alliance

AAA

DEFINITION of 'Strategic Alliance'

An arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. A strategic alliance is less involved and less permanent than a joint venture, in which two companies typically pool resources to create a separate business entity. In a strategic alliance, each company maintains its autonomy while gaining a new opportunity. A strategic alliance could help a company develop a more effective process, expand into a new market or develop an advantage over a competitor, among other possibilities.

INVESTOPEDIA EXPLAINS 'Strategic Alliance'

For example, an oil and natural gas company might form a strategic alliance with a research laboratory to develop more commercially viable recovery processes. A clothing retailer might form a strategic alliance with a single clothing manufacturer to ensure consistent quality and sizing. A major website could form a strategic alliance with an analytics company to improve its marketing efforts.

RELATED TERMS
  1. Coopetition

    Cooperation between competing companies. Businesses that engage ...
  2. White Label Product

    A product manufactured by one company that is packaged and sold ...
  3. Keiretsu

    A Japanese term describing a loose conglomeration of firms sharing ...
  4. Joint Venture - JV

    A business arrangement in which two or more parties agree to ...
  5. Shotgun Clause

    A buy-sell provision used by related parties in a business venture ...
  6. Consortium

    A group made up of two or more individuals, companies or governments ...
Related Articles
  1. War's Influence On Wall Street
    Bonds & Fixed Income

    War's Influence On Wall Street

  2. Mergers And Acquisitions: Understanding ...
    Fundamental Analysis

    Mergers And Acquisitions: Understanding ...

  3. Introduction to Types of Trading: Fundamental ...
    Trading Strategies

    Introduction to Types of Trading: Fundamental ...

  4. Bloodletting And Knights: Medieval Investment ...
    Options & Futures

    Bloodletting And Knights: Medieval Investment ...

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center