Strategic Alliance Influence the Growth and Operations of the Allied Companies


A strategic alliance is a contemporary issue affecting the strategic management of different companies across the globe. As a result, this research aims at establishing how the alliance influences strategic management, outlines what possible influence strategic alliance has on companies, and establishes whether they are positive or negative. As a result, this study aims to establish how strategic alliances influence companies’ operations and growth. Furthermore, the influence could be either negative or negative and, therefore, compare if it is a good problem or a bad problem for a company. Hence, several companies that have been allied will be used to carry out the study and most especially companies in the U.S. The research has delved into different aspects of the strategic alliance and, most especially, the different phases of the alliance and what factors they should keep in focus to ensure success. The alliance aims to enhance the success and learn new aspects from each other, and further, the impacts such innovations will bring about to companies is key. Despite positive responses experienced from strategic alliances, negative influences are also observed.

Keywords: strategic management, strategic alliance, innovation, strategic phases.


Strategic alliances ought to be among the major factors that propel growth for companies. Those companies could either be a startup or renowned and established companies. Furthermore, the alliance is not only limited to companies but also to global nations. As a result, nations like the U.S. have formed alliances with other countries to protect their interests. Such alliances include support from other nations during the war. Examples include the North Atlantic Treaty Organization (NATO) (Roulo, 2019). However, focusing on business, alliances exist between major companies like Uber and Spotify that offers both companies a competitive advantage in the market (Shankar, 2022). As a result, this research aims to identify how strategic alliances influence the growth and operations of allied companies as a contemporary issue in strategic management.

Background of the Study

This study is essential in demonstrating whether the strategic alliance is a contemporary issue affecting strategic management. Also, it will outline what possible influence strategic alliance has on companies and establish whether they are positive or negative despite viewing strategic alliance as an issue that influences strategic management. Most research carried out has fore cased the positive aspects of strategic alliance. Nevertheless, some studies have also presented the negative side of a strategic alliance, with most studies concluding that lack of compatibility often leads to the alliance’s failure. The such incompatibility often arises from cultural diversity between the allied companies (Elia et al., 2019). Besides, other differences or difficulties could ally an issue, which will be discussed in the later topics in this research paper.

Purpose of the Study

Strategic management is often marred with several issues affecting various organizations operating within the market. As a result, this study aims to establish how strategic alliances influence companies’ operations and growth. Furthermore, the influence could be either negative or negative and, therefore, compare if it is a good problem or bad problem for a company to have. Hence, several companies that have been allied will be used to carry out the study and most especially companies in the U.S. As an impact, companies in the future can understand how to utilize strategic alliances to their advantage.

Research Objectives

The research has two major objectives that it intends to delve into to assist future researchers in establishing where they stand in strategic alliance matters. The research objectives further have research questions that the research intends to answer.

Research Objective 1: To establish strategic alliance’s influence on companies’ operations and growth.

Research Question 1: How does strategic alliance influence companies’ operations and growth?

Research Objective 2: To establish whether negative influences affect companies’ intent to ally.

Research question 2: What kind of factors affect the alliance between companies?

Scope of the Study

This research is geared towards identifying what influences strategic alliances have on companies’ operations and growth. In turn, offers companies that need to be allied an insight into how that scenario looks. Furthermore, it will be a benchmark and further establish proper forums and methods to be followed to ensure that when the companies decide to take the alliance route, they can pursue it successfully without too much negative influence.

Significance of the Study

This study will be significant in enhancing strategic alliances for companies. Further, enhancing the strategic alliance’s influence will create a wider market for its operators. As a result, companies engaged in the alliance can fully maximize the market advantages presented with company alliances.

Literature Review


This section aims at reviewing the different concepts stipulated in this research’s thesis statement. Such aspects include strategic management, strategic alliance, company growth, and company operations. Besides, understanding the mentioned concepts will guide companies in making a more informed decision when it reaches that point of growth.

Key Concepts of Strategic Management

Strategic management ought to be influential when applied by companies in their management systems. As a result, strategic management is defined as the long-term goals and company objectives to adopt actions and allocate resources that will achieve the set objectives (Fuertes et al., 2019). According to Fuertes et al., 2019 and Henry, 2021, the strategy concept began with military conflicts and slowly became used in the management era in businesses. The military’s most strategic warring team could win over the other (Henry, 2021). So is the case in businesses, in that businesses with strict and effective strategic management overpower their competitors in the market. Therefore, Henry defines strategy as the taking of decisions to allow organizations to achieve competitive advantage over the long term (2021). Furthermore, a company’s strategy stems from various business activities, including manufacturing, distribution, and marketing. It is through how an organization carries out these activities that they are able to obtain a competitive advantage.

Companies use strategic management to analyze the different situations the organization undergoes. Through the analysis, managers can formulate strategies that will work for the company (Henry, 2021). As a result, they also establish ways through which the formulated strategies will be implemented. Therefore, the research will look into the three main areas of strategic management: strategy analysis, formulation, and implementation.

Strategy Analysis

Strategic analysis is the initial phase in strategic management. Its scope includes analyzing the macro-environment and the industry within which the company operates. Through the analysis, the company is in a position to understand its current position in the market. Thus, they are able to mitigate threats and exploit existing opportunities within the market (Henry, 2021). Establishing the competitive advantage and identifying elements that pause threat is critical and leads to the next order of business: strategy formulation.

Strategy Formulation

Strategy formulation begs questions again and again. Also, it alludes to the creative side of the managers, whereby formulation does not depend on the experiences. Nevertheless, depends on the changing environments within which businesses operate. Furthermore, the key point in strategy formulation is evaluation, and a company needs to be keen on knowing that the company could be faced with competing strategies. The vital point is focusing on the main strategy (Henry, 2021). Nevertheless, it is vital to note that strategy formulation exists within two levels: the corporate and the business levels. The latter is where strategic alliance exists, as will be discussed later in this paper.

Strategy Implementation

As established, all phases and steps of strategic management are essential. So is strategy implementation whereby, regardless of an effectively analyzed and formulated strategy, when its implementation is poorly executed, it will not work (Henry, 2021). Therefore, the company’s structure should be flexible for an implementation to be successful. Furthermore, there should be coordination between the organization and its stakeholders, which should be extended to communicating and understanding the strategy.

Strategic Alliance

Organizations seeking alliances are often guaranteed success in reaching out to markets dominated by either allied party. As a result, the formulation of strategic alliances by commercial, government, and social organizations are able to achieve market success and establish solutions to social problems (Babu et al., 2020). Furthermore, it is through strategic alliances that organizations overcome market challenges and explore market opportunities (Babu et al., 2020).

How Strategic Alliance Influence Company Growth

Alliances are formulated to obtain strategic objectives for organizations that encompass organizational growth (O’Dwyer & Gilmore, 2018). Furthermore, it enhances financial success, market expansion, and rapid diffusion of new technologies (Dey, Mohiuddin Babu, Rahman, Dora & Mishra, 2019). Also, strategic alliance triggers the changing business environment in the sense that it prompts rapid evolution, especially in technological evolution. Moreover, there is a saturation of existing markets and new markets there is also globalization and deglobalization of the markets (Foorohar, 2018).

Consequently, businesses should review their business models to ensure collaboration and relationship coordination to meet the rapidly changing characteristics of potential partners (Bouncken & Fredrich, 2016). It should be noted that strategic alliance depends on two elements; the degree of integration between partners and the underpinning of the relationship between the allied partners, which could be established through contracts, trust, or ownership (He et al., 2020). Businesses going into the alliance voluntarily choose to ally and are often independent of attaining individual and mutual strategic goals (He et al., 2020).

A strategic alliance is advantageous to the firms allied with the potential of offering benefits for the firms. However, in the same breath, it could create problems for the firms. Most especially relational risks (Gallear, Ghobadian & He, 2015). Such risks include a lack of commitment, cultural clashes, and opportunistic behavior (Cullen et al., 2000; Gomes et al., 2013; Das & Rahm, 2010). Hence, changes in the business environment bring challenges to companies seeking to create an alliance in the market (He et al., 2020). Nevertheless, changes cannot be stopped, and as such, businesses should consider organizational structures, alternative alliance formations, and governance mechanisms (He et al., 2020). Thus, look into how the organizations involved would deal with such issues.

A strategic alliance is there to help companies overcome unpredictable events. Therefore, the organizational development of capabilities such as relational is an adaptation process that is geared toward helping businesses adjust to unstable environments (Mamedio et al., 2019). Furthermore, an alliance offers the firms an opportunity to benefit in the sense that when manufacturing firms come together with a knowledge-intensive industry, they are likely to gain insights like downsizing, externalizing risks, sharing knowledge, and reducing customer uncertainty in the market (Bustinza et al., 2019).

To attain benefits from the strategic alliance, the most influential component for any business is corporate governance. Therefore, companies carrying out alliances, particularly international relations, should give their focus on that aspect. As a result, considering the factors that influence corporate governance affects the alliance (Sadegh et al., 2020). Resource exposure is another essential benefit that companies that are allied get. Thus, develop and provide information and knowledge that is needed in companies (Aggarwal, 2020). Therefore, resource congestion influences companies’ innovations (Aggarwal, 2020). Such benefits are influential in creating rapid growth for companies to attain their goals. However, it should be noted that attaining the benefits of knowledge from a partnering firm rises from the individual firm’s interest and time (Devarakonda & Reuer, 2018). Knowledge creation creates a competitive advantage for the partnering firm against its competitors.

Alliances are welcomed for companies willing to go into the alliance. However, the alliance should be carried out at the right time with the right partners (Cirjevskis, 2021), To ensure that the synergies between the alliances create value for the companies involved. In addition, the advantages the alliance offers the companies include competence-based synergies fostered by advanced technologies and the partners’ geographic presence (Cirjevskis, 2021). Thus, promoting their brands and preserving cultural identity.

It has been established that strategic alliance offers security against changing business environments and markets. However, there is more to a strategic alliance, including its ability to grow and gain a competitive advantage. Such advantages arise from value co-creation, like scale economies, cost-effective market entries, effective risk management, and learning from partners (Piroozi et al., 2021). Ensuring more success is attained in the alliance.

How Strategic Alliance Influence Strategic Management

As mentioned in the previous section Strategic Management (S.M.) is key to attaining an organization’s objectives through analysis, formulation, and implementation. At the same time, Strategic Alliance (S.A.) encompasses the propelling of a company towards achieving the set goals successfully. As a result, S.M. and S.A. are intertwined, and they each have to function together for a company to achieve the intended success. Therefore, Piroozi et al., 2021 state that there are phases that prompt success in S.A.

In the formation phase, for instance, numerous factors must be considered before going into the venture. Such factors include; social capital, partner selection, governance and form of management, time requirement, attitudes towards the alliance, and legal framework (Piroozi et al., 2021).

To achieve success, the choice of partner is very crucial. As a result, partners have to select partners with a couple of factors that include; desired resources, strategies, and goals. Furthermore, ensuring that partners fit is crucial; otherwise, everything else could go sour. Therefore, there are three major elements to consider when forming a partnership: partner congruence, compatibility, and complementarity (Piroozi et al., 2021). Apart from the fit of the strategies should be at. As a result, there should be high strategic flexibility, looking for similar resources, and agreement on fundamental resources (Dadfar et al., 2014) are all necessary concepts to consider.

The second factor is social capital which is prior exposure to the partner. Thus, it is essential to reduce the cost of finding a new partner and enhance economic value (Shakeri & Radfar, 2017). It is essential to ensure that the companies gain knowledge sharing, experience, and reputation from constant relations (Piroozi et al., 2021).

Governance and management in the alliance are crucial to ensure the alliance is a success. Therefore, reducing opportunistic behavior through selecting equity ownership and contractual provisions enhances the self-governance to manage the alliance (Dadfar et al., 2014). Such governance ensures equal contributions by partners and that they keep their core competencies when carrying out their activities.

The fourth important factor is time awareness. Each party ought to be informed on the time basis of their operation. Time goes hand in hand with the attitude of the partners in the sense that when they respect the time they are supposed to operate within, they develop a positive attitude (Dadfar et al., 2014), which ensures their operations are smooth and precise. Lastly, putting in place a proper legal framework is important, thereby helping protect the partners in case of any fallout. Furthermore, other important factors include; the financial market, private sector, and economic policies that will enhance the achievements of the alliance’s success (Ismail, 2013).

The second phase is the operational phase that, includes; the development of relational whereby when the partners commit their money and time, there is a high likelihood of fully committing to the alliance (Shakeri &Radfar, 2017). Furthermore, the level of commitment influences the communication and information flow between the partners, which promotes success automatically. Also, coordination is crucial because each partner is aware of their role and is working towards it. Through coordination, each partner carries out their role to prompt success (Russo & Cesarani, 2017) rather than the burden on one partner. Also, in this stage, the partners should consider their levels of control. As a result, they should have guidelines and mechanisms that guide what aspects they have control over, as a result optimizing the alliance’s success (Shakeri & Radfar, 2017). Evidently, in any alliance, there is a likelihood of conflict. Therefore, there should be stipulated guidelines that ensure conflicts like; cultural differences, goal divergence, and partner opportunism (Piroozi et al., 2021) are controlled to enhance alliance success.

Other aspects to consider in the operational phase include; alliance management capabilities, choosing the best people for the project, recruiting an independent team, and securing an external network (Kupp et al., 2017). Are all necessary factors in ensuring success is achieved in the operational phase? Furthermore, the workforce carrying out the tasks is vital because they will either succeed or fail.

The third and most vital phase when establishing S.A. is the evaluation phase. Establishing an alliance is important; however, evaluating whether the alliance is working is also necessary. As a result, alliance performance evaluation should be carried out. The evaluation is necessary to gauge whether the alliance was successful (Russo & Cesarani, 2017). Other researchers believe that the alliance’s success is measured when new business ideas are generated despite the set goal needing to be achieved (Marxt &Link, 2002). Other factors used to measure the achievement of the alliance apart from the goals include; the alliance’s resilience, the competitive position of the allied companies, and cooperation and revenues for the partners are crucial elements of success (Russo & Cesarani, 2017). Through the evaluation, the partners can understand what their alliance means and if there is any form of development they would likely consider (Dadfar et al., 2014).

The other factor in the third phase is furthering the alliance development. Based on the established evaluation, the partners could either forego the alliance or continue with it (Dadfar et al., 2014). Furthermore, the alliance development could lead to either of the following outcomes; a natural end, the takeover of one of the partners, premature termination, and change in the alliance structure (Tjemkes et al., 2013). Therefore, when the alliance is unsuccessful, either of the outcomes above is viable, and sometimes it can be rough for the companies and future alliances.

There is a co-existence of both strategic alliance and strategic management. They depend on each other to ensure the company attains the set goals. As a result, the teams addressing these independent factors should be in sync to ensure collaboration, effective communication, analysis, evaluation, and implementation of actions at both corporate and business levels. Therefore, enhancing the possible results would create growth for the companies.

Impact of the Alliances on Allied Companies

Despite research showing the positive side of things when it comes to strategic alliances, there are negative impacts the alliance could have on the companies. The most common issue with S.A. is cultural diversity which negatively influences the partners’ innovation capabilities (Elia et al., 2019). It is vital to note that partners’ characteristics and cultural diversity play a pivotal role in the alliance’s success (Capaldo & Messeni, 2014). According to Elia et al., an alliance between partners from two different countries is radically influenced by the home culture of each individual partner. These differences are heightened, thus affecting the way the partners interact and learn from one another and also affecting the exchange of resources, core competencies, and knowledge (Elia et al., 2019). These differences may also affect the companies’ coordination and ability to resolve conflict when it occurs (Lavie & Miller, 2008).

Moreover, there exists positivism in terms of cultural diversity, particularly when the alliance aims to explore and develop new technologies rather than delving into existing ones (Rothaermel & Deeds, 2004). As a result, the harmful results are greatly reduced, and instead, leveraging diversity to create diversity and creativity utilized by both companies (Stahl et al., 2010). On the negative spectrum, however, cultural diversity creates obstacles for efficient resource exchange and instead leads to a rise in coordination and negotiation costs, making it difficult to exchange knowledge (Bell & Zaheer, 2007), thus creating resistance between the partners (Shenkar, 2012). Furthermore, cultural diversity affects the views of the partners’ when it comes to identifying opportunities and threats. These differences could affect their innovation results.

Strategic Alliances in the U.S.

In the previous discussions, it has been established that a strategic alliance aims to achieve set objectives and, in addition, penetrate new and existing markets, gain new knowledge, improve their products, and gain a competitive advantage in the industry. As a result, in the U.S., for example, there are several alliances between companies. The alliances, at times, are between companies with opposite products and different methods of operation, as will be discussed. However, they are still able to gain advantages in the alliance.

The first example is the alliance between Uber and Spotify (Shankar, 2022). The alliance allows Uber users to connect to Spotify and stream their music while riding (Harappa, 2021). Therefore, both companies gain whereby Uber gains an advantage over their competitors by offering users a personalized experience and helping Spotify gain access to a wider customer market. Uber offers the customers in this alliance, and Spotify offers the technology (Kenton, 2022).

Similarly, Apple Pay and Master Card have formed an alliance to launch Apple Pay contactless transactions. As a result, payment has been made easier for MasterCard customers, whereby they could pair their cards with Apple Pay to make payments without having to go through the hustle of using a physical card (Harappa, 2021). They both gained whereby MasterCard got associated with a big established company, and Apple Pay gained an advantage where they were able to address bugs and resolve issues, ensuring prompt and efficient usage for clients

Another successful alliance is the one between Barnes &Noble and Starbucks. A bookstore and coffee shop combination shows that Barnes & Noble is still in the market despite other bookstores having shut down ages ago (Leonard, 2019). There is an advantage to both companies where they can each gain a market from each other. Therefore, increasing popularity for both stores.

There is a long list of successful alliances, but the last example this study will refer to is the alliance between Hewlett-Packard and Disney (Leonard, 2019). As a result, the technology aspect brought about by H.P. has been influential in the creativity sect of Disney innovation. As a result, their alliance has opened up ways for I.T. companies to create relationships and innovate their operations (Leonard, 2019).

Per the above examples, it is possible to have a strategic alliance between companies with totally different operations. Furthermore, the above companies have proved that despite internal cultural diversity, the intended goal is the vital driver that governs both partners in an alliance, ensuring they emerge successful and also have a competitive advantage over their competitors in the market. In addition, the alliances are aimed at enhancing the consumers’ experience.


A strategic alliance is an issue affecting strategic management. However, according to the research, most of the impacts presented have been positive rather than negative. The only negative impact of strategic alliance presented is the cultural diversity, which has also proved that it could offer the companies an advantage when utilized. It should be noted, nevertheless, that strategic management and strategic alliance co-exist with each other. The actions of strategic management directly affect strategic alliance, and the same is true for a strategic alliance to strategic management. Furthermore, companies should ensure they have considered the steps of creating an alliance without fail to ascertain and guarantee success. Noneall of the steps should be completed, that is, the formation, operational, and evaluation phases. Moreover, the other important facets within these main phases should be considered, including compatibility, conflict management, governance, commitment levels, coordination, alliance management, and capabilities, among other factors. Hence, the probability of having a successful alliance between companies is possible, and it has been proved by the likes of Starbucks and Barnes & Noble, Uber, and Spotify, among other numerous companies in the market. Also, the strategic alliance has been used in the past, and it continues to be used in creating protection against the business environment and general environmental factors and enhancing the market and innovation for companies. Therefore, strategic alliance is a good issue for companies. However, companies should consider their goals and compatibility, if they fit, before going into an alliance to ensure a likelihood of success in the end, with both parties gaining the intended objectives.


For companies intending to get into strategic alliances, they should focus on the main aspect, which is compatibility. Thus, ensuring that any major differences do not mar their alliance. Because companies could have differences; however, they are not inhibited by that because most of their strategies are aligned.

Another recommendation is that companies involved in the alliance should establish policies that will work out during and even when the alliance is non-existent. Alternatively, other outcomes apart from success are being experienced. Furthermore, the policies are geared towards protecting both parties involved.

Managerial Implications

A strategic alliance is geared towards growing the companies involved. Therefore, organizations, particularly the governance section and business section of the partnering companies, should ensure that the team put in place is efficient in carrying out their necessary roles. It will enhance the advantages the involved companies will obtain in that breath. Other values to be considered are the core competencies to ensure the partnering companies have a synergy, thereby increasing productivity and ultimately leading to innovation and growth for the company. Finally, cultural diversity is a menace to alliances. However, companies should look into ways to tap into each other’s differences, creating a superior alliance.


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