Strategic Alliance Agreement Law and Legal Definition

The Strategic Alliance Agreement (“Agreement”) is an arrangement between two companies who have agreed to share resources in a specific project. A strategic alliance is different from a joint venture where two companies pool resources in creating a separate entity. A strategic alliance can be forged for sharing products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. The alliance allows the parties to work together to hopefully realize greater benefits from the alliance than from individual efforts. The alliance often involves technology transfer, shared expenses and shared risk. A strategic alliance has several advantages like it may allow each party to concentrate on activities that best match their capabilities and provides great learning experience for both the parties, which may reflect upon their individual competence. Sharing their unique resources and capabilities often helps the companies create a competitive advantage in the market.