Business Agreements

A strategic business alliance is an agreement between businesses to pursue specific, mutually beneficial projects, usually motivated by cost reduction and improved service for the customer, while remaining independent organizations. Alliances are often bound by a single agreement with equitable risk and opportunity share for all parties involved, and they are typically managed by an integrated project team, the CreCon Group.

This form of cooperation lies between mergers and acquisitions and organic growth. Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance is a cooperation or collaboration which aims for a synergy where each partner hopes that the benefits from the alliance will be greater than those from individual efforts. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.

A strategic alliance is less involved and less permanent than a joint venture, in which 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.

Goals of Strategic Alliances:

  • All-in-one solution
  • Flexibility
  • Customer Acquisition
  • Add strengths and reduce weaknesses
  • Access to new markets and technologies
  • Common sources
  • Shared risk