A cooperative business activity, formed by two or more separate organizations for strategic purposes, that allocates ownership, operational responsibilities, financial risks, and rewards to each member, while preserving their separate identity/autonomy.

Strategic alliance is often a preliminary step to a joint venture or an acquisition.

Jordan D. Lewis

Seven Characteristics of a Well Structured Alliance

• Strategic Synergy - more strength when combined then they have independently.
• Positioning Opportunity - At least one of the companies should be able to gain a leadership position (i.e. to sell a new product or service; to secure access to raw material or technology)
• Limited Resource Availability - A potentially good partner will have strengths that compliment weakness of the other partner. One of the partners could not do this alone.
• Less Risk - Forming the alliance reduces the risk of the venture.
• Cooperative Spirit - both companies must want to do this and be willing to fully cooperate.
• Clarity of Purpose - results, milestones, methods, and resource commitments must be clearly understood.
• Win-Win - the structure, risks, operations, and rewards must be fairly apportioned among members.

Robert Lynch