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A strategic alliance can, however, bring its own risks. While the agreement is usually clear for both companies, there may be differences in how the firms conduct business.

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Differences can create conflict. Further, if the alliance requires the parties to share proprietary information, there must be trust between the two allies. In a long-term strategic alliance, one party may become dependent on the other.

Disruption of the alliance can endanger the health of the company. Starbucks brews the coffee. Both companies do what they do best while sharing the costs of space to the benefit of both companies.

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Strategic alliances can come in many sizes and forms:. How To Start A Business. Small Business Taxes. Automated Investing.

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What Is a Strategic Alliance? A strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project.

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A strategic alliance agreement could help a company develop a more effective process. Strategic alliances allow two organizations, individuals or other entities to work toward common or correlating goals.

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