What benefits may accrue to firms participating in strategic alliances?

 Firms may benefit from ease of market entry, shared risk, shared knowledge and expertise, and synergy/competitive advantage. Firms may experience entrenched competition, government regulations, or high costs to entering a foreign market. Strategic alliances can ease the costs of entry. Firms may also wish to minimize their risks associated with market entry. Alliances can minimize risks by sharing expenses or by providing non-financial assets such as brand recognition. Firms may also wish to learn about an expertise held by another firm. Finally, firms can achieve synergies and competitive advantages that were not possible working alone.

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