Answer:
Introduction:
Strategic alliances are a contract between two or more firms to pursue their common goals by merging their resources.
"Cross-border strategic alliances":
Cross-border strategic alliances are a strategy used to extend the business model internationally.
Reasons that firms embark on cross-border strategic alliances:
Many of the successful businesses go for expanding their horizons or markets once they are stabilized. The main reason to go for cross-border strategic alliances is profit.
Motivations of cross-border strategic alliances:
- To avoid barriers of import
- To distribute the costs and risks of new products
- To access specific markets
- To avoid political risk in new market
Driving forces for the companies in emerging economies in order to embark on strategic alliances:
- More profitability
- Market expansion
Small or medium-sized enterprise (SMEs) relationships with multinational corporations (MNCs):
Many of the small or medium-sized enterprise develop a unique service, which can be easily embedded into the current practice. Such innovation create a unique batch of services in the market that are readily acquired by the industry giants.
Such acquisition does not assist the SMEs in terms of profit, but also it assists the giants to maximize their market horizon as well.
Conclusion:
A relationship with multinational companies can potentially help in several ways by providing opportunities and resources to small or medium-sized enterprises.
