Some researchers have argued that strategic alliances are on

Some researchers have argued that strategic alliances are one way in which firms can help facilitate the development of a tacit collusion strategy. In your view, what are the critical differences between tacit collusion strategies and strategic alliance strategies? How can one tell whether two firms are engaging in an alliance to facilitate collusion or are engaging in an alliance for other purposes?

Solution

Strategic alliances strategy- Strategic alliances strategy is a kind of business practices when two or more firms agreed to work together independently and each firm has some expertise in their particular business.

Strategic alliances has a legal identity, we can take the examples of Tata and star buck coffee company for doing business in India.

Strategic alliance strategies may be in any form like funds and experience, brand value and finance and other several ways.

Tacit collusion strategy- Tacit collusion strategies more focus over the rate or price.

When two or more firms more and more focus over the price of market and they come together to fix the rate of markets that tacit collusion strategy take place. Tacit collusion is more and more similar to oligopoly market.

Tacit collusion strategy very much concentrated over the price of market.

As per my views it’s have several difference that clearly explain the difference between two strategies but some points of time these firms are easily take the advantages of prices.

The major difference between strategic alliance strategy and tacit collusion strategy as follow-

When two or more firms agreed to doing business but their expertise almost different we can say that they come for strategic alliance

When two or more firms come for business but their expertise is same, there will be something other than strategic alliance.

We can take the above examples of American MNC starbuck and Indian MNC Tata group entering in Indian restaurant market; it’s a clear example of strategic alliance.