Two types of Strategic Alliance

The strategic alliance can broadly be classified into two different types. One is known as “strategic alliance of product chain” which aims at assuring mainly the transferable knowledge which can be easily transferred or acquired. The other type is called as “strategic alliance of knowledge chain” which aims at acquiring the knowledge through close relationship and is namely concerned with acquiring knowledge which is difficult to transfer.

1. Strategic alliance of product chain
This is the link on the basis of product or the parts, with alliance among the enterprise as the center of focus. The initial stage of alliance between G.M. and Suzuki which began in 1981 is an example of strategic alliance of product chain. G.M. required small car on immediate basis and Suzuki wanted an access to the transportation system in America as well as the capital investment for its self-designed sub compact car, without incurring the cost and risk of constructing its own dealer network.

The strategic alliance of product chain like this had played only a very small role in acquiring knowledge.

2. Strategic alliance of knowledge chain
In this type of strategic alliance, focus is laid on knowledge and it aims at learning the knowledge as well as creativity. This type of alliance is not restricted to similar enterprises only and is carried out even among the wide range of different organizations also. A typical example of this type of alliance was the tie up between I.B.M. and Seimens, which was made public in 1990. The two companies aimed at acquiring new technology for design and manufacturing of computer chip for developing the second generation chip which would have an accuracy higher than the most advanced chip, through this alliance.