Look to this competitive advantage over your competitors. Many smart business leaders look forward to working for expedient benefits. A mutually beneficial relationship with another organization might be in your future? If you answered in the affirmative, the next question will be "I a strategic alliance or joint venture should begin?" Is this a question I'm often asked and the answer could be complicated?
More than just words
Actually, there is a big difference between a strategic alliances and joint ventures; cultural, operational, strategic and legal. A little strategy planning can and will, make a dramatic difference for your organization as your new relationship developed and implemented. Let's get it right from the outset.
Strategic Alliance
Her reason for developing a strategic alliance relationship with one or more other companies is your core competencies strategic use; proprietary processes, intellectual capital, research, market penetration, production and/or distribution functions and a number of other reasons. You will share your skills with you. You have an open door relationship with another entity. You will usually control. The length of the agreement could an expiration date or could with regular performance reviews open-ended. However, you want to simply on a contractual basis and not as a legal partnership with other organisations to work.
Joint venture (JV)
Their reason for creating a joint venture is a faucet or use convenient connection or overlap. A JV is a legal partnership between two or more entities. With a JV, you have something more than simple governance; have a completely new entity with a Board, officers and an executive team. Effectively a JV is participant owned a new organization, but the Foundation. The Board of Directors generally constructed organizations with representatives of the founding members. This new company is to "do business" with the founding entities-typically as a supplier.
Important differences
1. Your strategic alliance is a legal partnership, LLC or Corporation, a contractual or handshake agreement during the JV.
2. Your strategic alliance summons to deliver the core competencies and the differences of another organization, while the JV will be a mixture of cultures and creating a new organizational culture and path value for your organization.
3. Your strategic alliance requires continued relationship maintenance while the joint venture has a dedicated leadership team.
4. Your strategic alliance allows you to keep control over your own business but the JV chooses a new direction; with the management of Board of Directors.
5. You can maintain control over your proprietary creations, while in a strategic alliance, but in a JV involved, these creations are the property of the joint venture. If the joint venture fails, the distribution of prey can be a challenge.
Which is right for you?
There are numerous reasons, advantages and pitfalls, the available to you which path you choose. The key is to understand long-term wishes for you and your partner. In and out of a strategic alliance to jump quickly, but the joint venture takes much longer to start and may be difficult to end. The joint venture takes less necessary attention form involved again launched, because the own management team. If you are not prepared to devote time and resources for health and maintenance of your strategic alliance is the JV the better way for you perhaps? If control is important for you, strategic alliance would be the better approach.
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