Strategic Alliances and Partnering Innovations In the New Economy

June 19, 2001

Joint venturing historically has been an important means for doing business internationally.  Although many reasons to joint venture may be cited, there are a few that stand out in discussions of the traditional joint venture structures for industrial companies:

  • Complementary economics or experience or skills
  • Sharing venture risk
  • Providing local expertise in new marketing environments

Ultimately of course the purpose of joint venturing for industrial companies has been the enhancement of productivity and profits.

In the new economy, there has been an almost bewildering proliferation of strategic alliances; that is, ways of existing businesses partnering for mutual advantage.  These partnering or alliance arrangements are being made for many of the same reasons as the traditional industrial joint ventures of the old economy.  But they are also being done for new reasons and in new ways.

The structuring of strategic alliances has changed to keep pace with changing needs and changing ways of doing business in the new economy.  To understand the configuration of the new developments in structuring it is essential to do more than simply examine in detail the legal form of the new structures–although that can be helpful.  To understand what is happening to the structuring of strategic alliances it is beneficial to examine the emerging definition of the new partnering arrangements, to identify the characteristics of the new alliances and to examine questions such as what the businesses are trying to accomplish, what their strategies and partnering goals are, and what obstacles they are trying to surmount as they put together the structures for their partnering arrangements.

This paper will discuss the threshold question of what is a joint venture and/or a strategic alliance, will survey some of the innovations that have occurred in the old economy or traditional joint venture structures and then analyze what the new economy alliances are trying to accomplish and what characteristics of the new structures these goals create.

Finally the paper will discuss various types of strategic alliances being forged in the new economy and give examples of how they reflect the characteristics of strategic alliance structuring that have been identified. To conclude, the paper will discuss challenges in structuring and how they impact the role of the lawyer providing legal counseling and documenting the new strategic alliances.

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