GLOBAL STRATEGY, COMPETENCE-BUILDING AND STRATEGIC ALLIANCES

This article examines the growing phenomenon of firms that rely on a global strategy of building strategic alliances to fill out their product lines and to enter new markets. By relying extensively on licensing, joint ventures, and consortia to secure access to new markets and low cost production, many companies have formed long-standing technology sharing and co-production arrangements with firms in the Far East and Europe. The result has been a gradual but steady decline in these firms' ability to maintain technological and industry initiative to develop the next generation of products and processes in key industries. Firms that are unaware of the risks involved with strategic alliances will eventually lose control over their core competencies and skills when competing in a global environment.