Share resources to achieve a mutually beneficial objective

Reference no: EM13829882

Write your personal statement and cite in APA style.

Answer this question put it in the last paragraph along the personal statement with essay below.

Do you think that a lot of smaller companies attempt to advance their company by marketing off of larger companies?

A strategic alliance is "a relationship between two or more entities that agree to share resources to achieve a mutually beneficial objective." (Gray, 2015)

One way to think about this is if there is one company who manufactures a product and allows another company to utilize the exact same resources to manufacture the product to sell in a different market that the current company does not currently utilize, i.e. another country. (Gray, 2015) Another example of a strategic alliance is a restaurant that has formed an alliance with a local fresh produce market.

There are multiple challenges and disadvantages to forming a strategic alliance. Some of these disadvantages are lack of control, unequal benefits, inadequate reputations, and liability. (McQuerrey, 2015) The disadvantage associated with lack of control is not being able to choose certain aspects of your company's items. In the example about the restaurant forming an alliance with a local fresh produce market is that if the restaurant only utilizes the fresh produce market, the restaurant has lost the control of which farmers are being used in the market. This could lead to the restaurant potentially not using the quality of food that they have become accustomed too. Unequal benefits and inadequate reputations could create a disadvantage as well. If you are in a contractual agreement with the fresh produce market that you will only buy produce from them and you are telling all of your customers that you get all of your produce from the local market, if the local market is developing a bad reputation it can cause a huge disadvantage for your company. Liability is the last disadvantage that I will discuss. The liability associated with having to solely rely on one company can greatly impact your company in a negative way. In the example that I have been using, if the fresh produce market has been identified as utilizing bad business practices or illegal pesticides and becomes temporary unable to operate, your company will be stuck with finding another source of produce. (McQuerrey, 2015)

References

Gray, Carolyn. (2015). What Are Strategic Alliances? Retrieved from https://smallbusiness.chron.com/strategic-alliances-23997.html

McQuerrey, Lisa. (2015). The Disadvantages of Forming Business Alliances. Retrieved from https://smallbusiness.chron.com/disadvantages-forming-business-alliances-73390.html

Reference no: EM13829882

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