Meaning of Strategic Alliance in English

Meaning of Strategic Alliance in English

In order to know the meaning of strategic alliance, the first thing we have to do is know the etymological origin of the two words that shape it:
-Alliance, first of all, derives from Latin. Specifically, it comes from the sum of the verb “alligare”, which can be translated as “to tie”, and the suffix “-anza”.
-Strategic, on the other hand, emanates from the Greek, more exactly from “strategikos” which is made up of three different parts: the noun “stratos”, which means “army”; “Agein”, which can be translated as “carry out”, and the suffix “-ico”, which is equivalent to “relative to”.

An alliance is a covenant, agreement or arrangement between two or more parties. Strategic, meanwhile, is that linked to strategy: directives to coordinate or manage something.

It is called strategic alliance to the pact that established companies, organizations or other entities to work together and achieve that everyone can achieve their goals. It is a very frequent cooperation methodology in the business context.

In addition to everything indicated, it is important to underline that any self-respecting strategic alliance project consists of several phases:
-Training. Within this period, the parties involved must undertake both a formulation of the strategy to be followed and an evaluation of the partners and, of course, the pertinent negotiations to reach a firm agreement.
-Operation. It is the moment in which a clear structure of the strategic alliance will be established, determining, among other things, the functions that each of the parties involved will perform.
-End of the strategic alliance. This moment can occur for different reasons, among which we would highlight the following: because the established deadline that would last it has been met, because there are situations that end it prematurely, because one of the two parties wants to end it, because new partners emerge…

Strategic alliances can allow partners to contribute products, technology, knowledge or capital, to name a few possibilities. The aim is to develop synergies: that which is generated when two or more factors together give a result superior to that which would be obtained with the sum of the individual results. In other words, the strategic alliance allows reaching a better result than that which the partners would arrive separately.

An Argentine company can establish a strategic alliance with a Chilean company so that both can enter the other country’s market. With the support of the Chilean firm, the Argentine company is in a position to land on the Chilean market more easily than if it did it alone. Similarly, the Chilean company can operate and grow in Argentina thanks to the collaboration of its partner.

A Spanish club, for its part, can sign a strategic alliance with a Uruguayan team. The European entity invests to build a sports school and a training ground in Uruguay, while the Uruguayan club is committed to giving priority to the Spanish team when it comes to transferring the best young players to emerge.

Strategic Alliance