Differences Between Joint Venture and Strategic Alliance
The points given below explain the difference between joint venture and strategic alliance
1. When an independent entity is formed by two or more other entities, the business venture is known as a joint venture. On the other extreme, a strategic alliance is an arrangement between two or more companies from various nations, work together to collaborate in any activities of value chain system.
2. The entities which undergo to form the joint venture, do not operate as independent entities. Conversely, the firms undergoing strategic alliance, operate as independent entities.
3. The contractual agreement must exist in the case of joint venture whereas the strategic alliance may be expressly declared or implied between the concerned entities.
4. The joint venture is the most complicated type of strategic alliance. As against, a strategic alliance is a form of collaboration or corporate partnering.
5. The joint venture is a separate legal entity, created by the conjoining firms. On the contrary, a strategic alliance is not a separate legal entity.
6. Joint Venture is aimed at reducing risk, while strategic alliance focuses on reward maximisation.
7. When we talk about management, a joint venture has bilateral management. In contrast, a delegated management can be found in a strategic alliance.