This simple story suggests the power and potential of strategic alliances, a business concept that's changing the structure and dynamics of competition throughout the world. The New Shape of Business Rivalry . Put simply, a strategic alliance is a relationship between firms to create more value than they can on their own. The firms unite to pursue agreed upon goals, while remaining independent. Another way of describing a strategic alliance is to think of it as a structure that links specific facets of two or more firms.
Strategic alliances are pervasive and growing rapidly.
Du Pont and Sony are collaborating on optical memory storage products, and General Motors and Hitachi are working together to produce electronic components for automobiles. Companies are forming alliances with their rivals, their suppliers, and even their customers. Increasingly, groups of companies are competing against other groups, changing the distribution of economic power in society and nudging more and more single companies into alliances. It's easy to see why. Strategic alliances enable companies to create new products, reduce costs, penetrate additional markets, preempt competitors, and generate more revenue.