Strategic alliance formation

Abstract

Strategic alliances are becoming an essential feature of firms' overall organisational structure, and competitive advantage increasingly depends not only on a company's internal capabilities but also on the scope of its relationships with other companies.

The literature suggests various motives for strategic alliance formation. However, these studies examined formation from the perspectives of strategic alliance firms only, thus not allowing explanation of why firms would or would not want to form strategic alliance since, it would be apparent that the firms in the sample already have alliance therefore should have high propensities towards the formation motives.

This research attempts to examine firms' decisions to form strategic alliances by exploring their likelihood or propensities to seek cooperation with other firms, on a number of motives and expands the sample into both strategic alliance and non-strategic alliance firms. The results of the study suggest that, based on the motives identified from the literature, strategic alliance firms differ significantly on four categories; product-related, market-related, resource-related and environment-related motives. Analysis of individual motives also revealed considerable support to differentiate strategic and non-strategic alliance firms based on the formation motives.