Read Jakada’s XXXXXXXXXXarticle, “Building Global Strategic Alliances and Coalitions for Foreign Investment Opportunities” on building global strategic alliances. What steps should the exporter take...

I. Strategic alliance: an overview
A global Strategic alliance is established when two companies with similar business work together to accomplish a mutually beneficial goal like entering a new geographic market. Strategic alliance is effective specifically when the government prohibits import aiming to protect its domestic industry. One of the major purposes is to maximize the competitive advantage of the joint venture in new geographical market. The major reasons for traditional business to enter into the strategic alliance is geographic expansion, cost reduction, exploit foreign investment opportunities and enjoy the supply chain synergies. Several studies have indicated that 50% of strategic alliance live up to the expectations. (BusinessAdvancementInc)
The alliance between Hewlett-Packard and Disney is a good example of successful partnership where two powerhouses from entirely different industries have such synergy. Strategic alliance can add value to the business through various ways that include expanding the customer pool, increasing the speed of new product development, reducing the cost, sharing the risk and gaining the access to the restricted market. (Leonard, 2019)
II. Steps to ensure success in strategic alliance:
In order to have a successful strategic alliance, it is imperative to follow an organized approach. Before selecting a partner, it is essential to develop the own alliance objective. The first step is to select a right partner for the intended goals. The second step requires to share the right information with the partner. Third step is nothing but a negotiation deal that involves both risk and benefit analysis. Fourth step relates with an agreement related to market and corporate expectations. The final step is to evaluate and adjust the mutual commitments to achieve joint objectives. These five steps are recognized as the critical basis for a successful strategic alliance. It is very important to recognizes and address the crucial issues that would occur at each stage of the alliance. (Segil, 2002)
III. Critical issues while forming an alliance:
International business literature has several examples of successful strategic alliance. Though the alliance is mostly considered as a win -win strategy, it is also associated with huge risk. Managing various risk factors associated with global alliance is no doubt a complex job. Cross cultural issues like the linguistic barriers, lack of communication and mutual understandings are some of the critical issues facing by the corporations involved in strategic alliance. Many strategic alliances failed because of the lack of mutual trust- it has been...