Strategic Alliances

When more than one independent entities develop, manufacture, or sell offerings together, they are entering a strategic alliance. There are three key types of alliances:

1. Non-equity alliances: firms working together make a contractual agreement, but they do not take equity in each other's companies. 1. Licensing agreements 2. Supply agreements 3. Distribution agreements

2. Equity alliances: firms supplement their contracts with equity holdings.

3. Joint ventures: collaborating firms establish a legally independent company, in which they both invest and share profits.