The advantages and disadvantages of stratgy alliance - Essay Example

This is achieved through various strategies including forming joint ventures, licensing etc. for example, in Pharma industry, firms tend to issue licenses in various different markets where they may not have the direct physical presence of their manufacturing and selling facilities but their brands may be selling into those markets through licensing and distribution of their products. 3) Forming Strategic alliances provide organizations to create synergies for each other so that resources can be better utilized at their most feasible cost to the organization.

By utilizing the more efficient resources of other organizations, firms tend not to achieve only the synergies but also a chance to effectively utilize and take advantage of the resources of their strategic partners. 4) Making Strategic alliances at the global level provide opportunity to the firms to transfer distinctive competencies. As discussed above that the organizations in order to expand and realize it’s potentially, try to take advantage of the distinctive competencies of their strategic partners. 5) By making strategic alliances, organization tends to obtain more access to the capital.

Since associating themselves with the firms that have more access to the resources therefore can provide organizations a better and more liquid form of financial resources to tap. (Rushika) 6) Alliances help organizations to exploit vertical markets. By doing so the organizations tend to align themselves vertically also in order to ensure various strategic options. These options can include securing the strategic flow of raw materials to the organization, effective flow of technology and labor etc.

(Casseres) 7) Making alliances allow firms to develop new technologies. Since with the help of alliances, firms tend to utilize the services of each other and hence the technologies therefore it provide firms an opportunity to develop new