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One can expect technology transfers, economic specialization in synergistic strategic alliance. Stages undergone by the agreement while forming Synergistic Strategic Alliance: Performing SWOT analysis of partner and looking for capabilities and resource gaps which can be filled by alliance Contract Negotiation: Making rules and regulations for alliance partners.
Formulating guidelines to be followed and fines for intentionally poor performances Alliance Operation: Assessing the ongoing operations, its performance and rewarding for better results. Filling of resource and workforce gaps Alliance Termination: Termination of agreement after meeting the laid down objectives Advantages of Synergistic Strategic Alliance Adequate resources availability due to sharing Strengthening in weak sectors by learning from other firm Concentrating on competitive advantage and making higher margins Disadvantages of Synergistic Strategic Alliance Risk of losing confidential data to alliance partner Absence of common administration leads to instability and lose in control Increase in competition after break up with alliance partner Hence, this concludes the definition of Synergistic Strategic Alliance along with its overview.
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The key to growth through acquisitions is to take advantages of the synergies that a carefully and successfully orchestrated acquisition should yield.
Business owners often find that growth through acquisition is a faster, less expensive, and a much less risky proposition than the traditional methods of growth realized through expanded . In a well-executed acquisition, the acquiring company can take advantage of synergies.
That is, the two companies together will be stronger and more profitable than either company was previously. Synergy is roughly defined as two or more things together being better or more effective than the sum of their parts.
In short, when two or more organizations join hands together for creating synergy and gain a mutual competitive advantage, the new entity is called a Joint Venture. It can be a private company, public company or even a foreign company. A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations.
A strategic alliance will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship.