One of the potential drawbacks of promoting new alliances is the misinterpretation of the benefits that each company can bring. One party can develop an exaggerated understanding of what the other party has to offer. Suppose Company A expects, for example, that Company B will provide more resources with more equipment, but Company B is not able to do so. The excessive expectation of Company A may be due to misunderstandings about the statement of Company B. A simple misunderstanding could lead to the decline of the partnership. The relationship may be short-term or long-term and the agreement may be formal or informal. The assets that each company contributes to the strategic partnership can be tangible or immaterial. One company`s reputation, for example, can benefit the other. Companies can also provide resources such as finance, expertise, infrastructure, work and equipment. In addition, they can share their access to markets. Companies based in different parts of the world sometimes partner in a global strategic partnership that allows each company to reach a new market. Sharing their assets allows companies to increase their skills, save money and expand their market base.
A strategic partnership (see strategic alliance) is a relationship between two commercial enterprises, usually formalized by one or more commercial contracts. A strategic partnership will generally be less than a legal partnership unit, agency or corporate partnership. Strategic partnerships can take many forms, ranging from shake-hand agreements to contractual cooperation, to equity alliances, either the creation of a joint venture or cross holdings. In the current market, some experts say this is the way to go into strategic alliances. With the complexity of the market requirements, it is impossible to remain as rigid as a mountain. It is better to bend and follow the river while maintaining a path, like a river. Partnering with useful organizations offers several benefits that collect contributions for the long distance. But to reap the benefits, you must engage in an alliance that perfectly matches your request. Read on to learn about the different types of strategic partnerships and some of its benefits.
A company can form a strategic alliance to expand into a new market, improve its product range or develop a head start on a competitor. The agreement allows two companies to work towards a common goal that will benefit both.