The Risks of Strategic Alliances

A strategic alliance can bring risks. While the agreement is usually clear for both companies, there may be variations in how each firm goes about business. This difference can create conflict. Further, if the alliance requires one party to give proprietary information to the partnered business, there must be trust between the two allies.

 

With a long-term strategic alliance, both parties may also become dependent on one another. If one firm is more dependent than the other, it could cause additional friction as one side gains an advantage over the other.