what are the potential benefits and risks of strategic allia

what are the potential benefits and risks of strategic alliances and how can a firm minimize the risk and fully exploit the benefits.

Solution

Strategic alliances are agreements between companies from different nations that are competitors like a joint venture or short term contract.Some potential benefits are :it facilitates entry into foreign market and sharing of fixed costs and risks from new production activities,benefits of each other\'s skills and assets.

Risks of such alliances are :Have to give innovative ideas and technologies to other country.

So firm should minimize the risk by carefully selecting the partners from other country,build trust and friendly relations between countries,gain from partner\'s knowledge,make contractual safeguards so that technology transfer (which is not meant to be) would not be possible.