by Matthew Lister

Created on: February 06, 2007   Last Updated: April 13, 2007

Business writers typically define a strategic alliance as a merger or acquisition. This is a narrow view. It's also inadequate because, these days, strategic alliances are taking on unfamiliar shapes among organizations. There's a more compelling interest than profit. And joining two (or more) companies to make more money isn't so much a strategic decision as it is a business tactic.

Strategic alliances are, at least in theory, meant to give each organization a return which they could not otherwise achieve on their own. In the business context of a corporation or partnership, this is a financial return. In the case of a charitable organization, it may be an affiliation with like-minded NGOs. One example is the relationship between universities and literacy or community-development charitable organizations. The university's strategy in supporting a community effort may be to increase its local presence within a community, or to raise its profile and, indirectly, help its graduates find work in their communities.

Some of the most fertile strategic alliances have come from the public sector. And, to provide a balance among a crowd of voices, it's worth exploring some of the interesting strategic alliances that public (and some corporate) organizations have implemented over the years.

Strategic alliances typically begin as ideas to build market share, brand, profits, service reach, product design or quality, or new market penetration. One organization very often realizes it can't achieve this all on its own. It may have committed resources to other, revenue-generating businesses or clients. It may not have the necessary intellectual capital to achieve one of these goals, and so, it searches for an alliance as a means to foster its own knowledge growth. Whatever the case, we learned a great deal from the merger and acquisition fever of the past thirty years.

Crudely speaking, there are three things to evaluate when considering a strategic alliance. First-and most important-start with a clear analysis of the business environment. What market trends have emerged? How are your customers changing? What are competitors offering that you aren't? Is the market too mature for your products? How do competitors win new customers: by design, by features, by continuous innovation, by price, by reliability? Do competitors beat you to the market? Are there many substitutes for your product or service? Which groups support the future of your product? (Be careful here-we all know

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