Strategic Alliance

Concept summary by Sam Mishra, MBA (MIT Sloan)

Business agreement between two companies for common gains. They companies may or may not operate in the same markets, depending upon how the companies define their markets.  If they operate in the same markets, they may or may not be competitors.

Strategic alliance is the normal operative amongst hypercompetitive high-tech outfits, big and small, in Silicon Valley. Frequently, a smaller firm tries to eke out an alliance with a bigger competitor, in the hopes that it will gain access to the largest customer base of the bigger firm. In return, the bigger firm gains access to a niche product / service that complements its own product lines.

Also see relational contracts.