The development and deployment of covid-19 vaccines in less than a year was a stunning achievement for science. But it also illustrated the power of a particular kind of partnership: the strategic alliance.

Strategic alliances brought together biotech ventures with revolutionary vaccine technologies. They united pharmaceutical giants with the capabilities and infrastructure required to successfully speed the drugs through clinical trials and regulatory approval and into mass production and distribution. And the partnerships, which produced the Pfizer-BioNtech, Moderna, and AstraZeneca-Oxford vaccines, were executed with impressive efficiency. The speedy development of covid-19 vaccines illustrates why the number of strategic alliances has grown dramatically in recent years, (see figure 1). Companies in sectors as diverse as healthcare, transportation equipment and discretionary consumer products are scrambling for competitive advantage in an era of swift, disruptive technological change on multiple fronts. And they are finding that strategic partnerships offer one of the best ways to meet the crushing need to innovate, scale up, and get to market. Figure 1: Strategic alliance deals surged eightfold from 2012 through 2020 Building and managing a successful collaboration is not easy, however. Indeed, a high percentage of strategic alliances fail. That is a risk many companies can no longer afford. In today’s rapidly transforming business landscape, investing six months to a year in an unproductive effort to jointly develop a cutting-edge mobility, industrial internet of things (IoT), blockchain, or remote health care-delivery solution, for example, can translate into big missed opportunities and a loss of market share. Why more companies are choosing alliances Strategic alliances are medium to long-term partnerships in which each participant contributes
non-monetary assets to achieve a joint goal. The core advantage of strategic alliances is that they can enable deeper collaboration and higher agility than other forms of partnerships. Alliances are typically preferable to straightforward transactional contracts when both parties share a strategic goal, need more than a short-term collaboration and are not certain of the outcome. They are also much easier to establish and dissolve than joint ventures, mergers and acquisitions and require less commitment. Alliances enable narrower, more-focused collaborations. For example, the two companies can collaborate on a single product line. And they do not require a merger with or acquisition of the entire company in order to create synergy. Alliances can also take on more experimental projects that move partners into unknown territory. In fact, alliances are often a means for two companies to test the waters with each other before committing to a joint venture. The strategic alliance Sony and Panasonic formed in 2013 is a good example. After collaborating successfully, the two companies formed a joint venture that manufactures televisions with organic light-emitting diode screens. Companies often have several motivations…

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