If a firm is planning a strategic alliance then how will it decide about the type of strategic alliance and how will it proceed through different stages of alliance formation. Discuss.

Strategic Alliances can be of various types depending upon the factors like capital commitment, type of industry, structure of organisation etc. Strategic alliance on the basis of type of industry i.e. Horizontal Strategic Alliance Vertical Strategic Alliance Inter-sectoral Strategic Alliance Strategic alliance on the basis of capital such as Joint venture, Equity strategic alliance, Non-equity strategic alliance, or Global Strategic Alliances The type of strategic alliance has to be chosen keeping multiple factors in mind such as the overall business goal or objective, development or maintenance of a core competency or other source of competitive advantage, blocking a competitive threat, creating or maintaining strategic choices for the firm, mitigates a significant risk to the business etc. Different stages of alliance formation: (i) Strategy Development (ii) Partner Assessment (iii) Contract Negotiation (iv) Alliance Operation (v) Alliance Termination