business alliance

Popular Terms
An arrangement or relationship among independent businesses with corresponding goals, established for a specific purpose and often for reducing costs and improving customer service. The collaboration is usually managed by a team with members from each business and held together by one agreement giving an equal share of risk and opportunity to each business. An example would be a shared marketing program between Wal-Mart and Procter & Gamble.

The following are the five basic types:
1. sales alliance-an agreement to sell products or services that complement one another

solution-specific-an agreement to develop and sell a particular business solution together
3. geographic-specific-an agreement to market products and services in a particular geographic area together
4. investment-an agreement to combine funds for shared investment
5. joint venture-an agreement to share control, profit, and loss in a particular economic undertaking

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