Powering your Inorganic Growth Strategy: Strategic Alliance as an Alternative to the M&A Route
Growth through mergers and acquisitions (M&A) is a popular route for many companies looking to increase revenue, acquire new talent, diversify operations, or market development. Many of these companies look to M&As to achieve these goals however, M&A is not the sole path to those results. Over time organizations looking to diversify and or expand have learned to adapt to new and distinct strategies as changes in the business world accelerate. These accelerated changes have influenced how an organization develops and accesses skills in order to stay relevant and seize new opportunities in today’s modern business world.
Strategic alliances are one of many inorganic growth routes that has emerged as a key and well-known strategy of organization growth in today’s modern corporate world. Statistics show a global trend toward an increase in partnerships. Organizations are actively considering strategic partnerships as a preferred expansion strategy in contrast to mergers and acquisitions as a first step, an easier and simpler process to working up to a formal merger and or eventual acquisition. We will spend time in this article and follow-up articles to study both growth options and why strategic alliances appear to also now becoming a more popular trend.
When are Strategic Alliances preferable to Mergers and Acquisitions?
● Strategic alliances may be a preferable alternative when corporations choose to have short to medium-term partnerships since the parties to the alliance may determine the duration of the relationship.
● Strategic alliances may be a very efficient approach to take advantage of fresh strategic possibilities, look for new development sources, and boost the company’s profitability. They are beneficial in high-uncertainty scenarios and industries where there is expansion potential that a firm either cannot or does not want to explore on its own.
● Strategic alliances are sometimes opposed to M&A because this strategy can share risk and limit the company’s resources to commit to the business operations. The risk may appear in a variety of ways. One is the financial risk connected to the substantial outlay of funds needed to pursue a particular opportunity. An alliance can help spread those expenses and occasionally even bring them down.
● Strategic alliances are becoming a more popular strategy for businesses in industries experiencing significant technical or commercial change to handle the risks brought on by uncertainty. Alliances can be a means to combine expertise and explore new market prospects when the future growth of an industry is very uncertain—without committing too many resources before the sector’s future shape becomes obvious.
Strategic alliance is now a tool that can equip companies to keep pace with market change. A priority for any company looking to flourish and increase value in today’s current business climate of unprecedented change with a heightened focus on innovation. A company must continually expand, improve, and energize its portfolio if they want to compete and take advantage of new opportunities.
Inorganic growth, including mergers and acquisitions and strategic alliances, is one of the fastest ways to build a business today. HWA Alliance of CPA Firms can assist you in your pursuit of consulting or advisory services in strategic alliances to help you reach a conclusion and provide recommendations on your company’s best course of action. Our professionals offer our clients various financial advisory services with core experience in strategic alliances and mergers and acquisitions (M&A). We will advise your company as it explores and assesses strategic and financial solutions. We will assist your company in identifying the greatest prospects for inorganic expansion thanks to the knowledge and experience of our staff and the use of our renowned advisory services. We customize each company’s strategy and system of operation to get the most significant outcomes. We guarantee the best outcome possible, which satisfies and aligns with your company’s vision and objectives.
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