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Cross-Border Alliances

Define and discuss cross-border alliances. What are they and how do they work?

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Define and discuss cross-border alliances. What are they and how do they work?

Cross-border alliances are used by organizations to strengthen and maintain their position in the market place. It involves two or more firms headquartered in different countries agreeing to cooperate as partners in an arrangement that's expected to benefit both firms. In other words, cross-border alliances can be defined as partnerships that are formed between two or more firms from different countries for the purpose of pursuing mutual interests through sharing their resources and capabilities (Doz & Hamel, 1998; Yan & Lou, 2001). Most of the time, it is seen as relatively fast and efficient way to expand into new markets and incorporate new technologies but the success of cross-border alliances cannot be assured. It appears that it has become a common way for firms to successfully compete without growing and expanding by having deals that result in cross-border alliances (CBAs). CBAs mean differently according to industry. In insurance, cross-border alliances provide means to move to new markets while in other industries like pharmaceuticals and software technology and other small enterprises developing new products, they may enter into alliances with larger firms that can help them manufacture and distribute their products. There are other reasons for cross-border alliances ...

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The solution discusses the definition of cross-border alliances and how they work. References are included in this solution.