Business – 1.3 Size of business – Business growth | e-Consult
1.3 Size of business – Business growth (1 questions)
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Disadvantages of strategic alliances for market entry
- Limited control over partner actions – the partner’s decisions can affect brand reputation and market performance.
- Knowledge leakage – sharing proprietary technology or market intelligence may empower a future competitor.
- Coordination difficulties – differing corporate cultures, objectives, or management styles can lead to conflict and inefficiency.
- Unequal commitment – one partner may invest more resources or effort, creating an imbalance that undermines the alliance’s effectiveness.
Mitigation strategies
- Draft detailed, enforceable contracts that specify performance metrics, confidentiality clauses, and exit provisions to protect intellectual property and ensure balanced contributions.
- Implement joint governance structures (e.g., steering committees) that provide regular oversight, facilitate cultural integration, and allow swift resolution of disputes.