Joint venture V/S strategic alliance – the better option

As both joint venture and strategic alliance have their own benefits and shortcomings, the choice of an alternative depends on the long term objective of the partnering companies. A strategic alliance can be entered with ease while a joint venture takes time to build as well as to dissolve.

As a separate entity with a new management team is created in case of a joint venture, the stakeholders of the original firms need not be much involved in the functioning of the joint venture entity. A JV needs less dedication from the stakeholders. Whereas in strategic alliance one needs to devote time and resources to ensure that the strategic results are fruitful. If one wants complete control over their operations then a strategic alliance would be a better option compared to joint venture. A strategic alliance tries to club the strengths of the two firms while a joint venture is a blend of two or more cultures which are moving towards a common end.