What are the positive consequences of alliances? Provide at least 3 examples.

The first category is organizational advantages. You may wish to form a strategic alliance to learn necessary skills and obtain certain capabilities from your strategic partner. Strategic partners may also help you enhance your productive capacity, provide a distribution system, or extend your supply chain. Your strategic partner may provide a good or service that complements a good or service you provide, thereby creating a synergy. If you are relatively new or untried in a certain industry, having a strategic partner who is well known and respected will help add legitimacy and credibility to your venture.

A second category is economic advantage. You can reduce costs and risks by distributing them across the members of the alliance. You can also obtain greater economies of scale in an alliance, as production volume can increase, causing the cost per unit to decline. Finally, you and your partners can take advantage of co-specialization, where you bundle your specializations together, creating additional value, such as when a leading computer manufacturer bundles its desktop with a leading monitor manufacturer's monitor.

Another category includes strategic advantages. You may join with your rivals to cooperate instead of compete. You can also create alliances to create vertical integration where your partners are part of your supply chain. Strategic alliances may also be useful to create a competitive advantage by the pooling of resources and skills. This may also help with future business opportunities and the development of new products and technologies. Strategic alliances may also be used to get access to new technologies or to pursue joint research and development.

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