A Strategic Alliance is an arrangement between two companies to undertake a mutually beneficial project, with each remaining independent.
Joint Venture is a form of Strategic Alliance that is more complex and binding. In a Joint Venture, two businesses pool resources to create a separate business entity.
The three basic types of Strategic Alliances are: Joint Venture, Equity Strategic Alliance, and Non-equity Strategic Alliance. Strategic Alliances share the following characteristics:
- They feature an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project;
- They contain an agreement that may help a company develop more effective processes; and
- They allow two organizations, individuals or other entities to work toward common or correlated goals.
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