Abstract
Joint ventures (JVs) and alliances have been commonplace in high-technology industries, many segments of manufacturing, the oil exploration, mining, and chemical industries media and entertainment, financial services, pharmaceutical and biotechnology firms, and real estate. They have taken the form of licensing, distribution, comarketing, research and development agreements, and equity investments. The term business alliance is used throughout this chapter to include joint ventures, partnerships, strategic alliances, equity partnerships, licensing agreements, and franchise alliances. The primary theme of the chapter is that well-constructed business alliances often represent viable alternatives to mergers and acquisitions (M&As), and they always should be considered one of the many options for achieving strategic business objectives. The chapter discusses the wide variety of motives for business alliances and the factors common to the most successful alliances. Also addressed are the advantages and disadvantages of alternative legal structures, important deal-structuring issues, and empirical studies that purport to measure the contribution of business alliances to creating shareholder wealth.
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