November 2002

Through Strategic Alliances, companies of all sizes can participate in the global marketplace. This powerful tool enables business partners to achieve goals together that they could not achieve alone. Risks and resources are shared. New markets are created - with shorter lead times. New profits show up on the bottom line. Our offices across the United States can provide key contact and market information for firms seeking to form cross-border business partnerships. Companies committed to success should consider the strategic alliance services we offer when developing their corporate strategy for doing business in both domestic and international markets.

• Why Form an Alliance?
• What is a Strategic Alliance?
• Why Should a Canadian-based Firm Consider an Alliance Partner from the United States?
• Why Canadian-based Companies are Desirable Alliance Partners

Strategic alliancing has become one of the leading business strategies of the new millennium. Commonly utilized by high technology companies, they are increasingly popular with businesses in all industrial and service sectors across North America. The results of the 1998 Coopers and Lybrand, Governor's Conference on Economic Development, showed that approximately half of the U.S.' growth companies plan to use some form of alliance to expand their business. Further, firms currently involved in international alliances are growing 64% faster than their peers.

A Strategic Alliance is a formal, mutually-agreed upon, commercial collaboration between companies. While partners of the Alliance pool, exchange and/or integrate selected business resources for mutual benefit, they remain separate, entirely independent businesses.

Strategic Alliances take many forms and have become more sophisticated and flexible over the last few years. Companies may choose an alliance that involves simple market exchanges or cross-licencing agreements, or they may form a more complicated partnership that includes cooperative-manufacturing arrangements or joint-equity ventures.

For many firms, considering a strategic alliance option can be both challenging and intimidating. Companies new to the alliance option might want to look in areas where there are both opportunity and a relative ease in doing business. The United States fits that description!

• The U.S. economy is diverse, prosperous, and offers opportunities for partnering in a wide range of sectors, such as aerospace, automotive, food processing, high technology, manufacturing, service industries, and building products.
• U.S. firms have developed cutting edge technology which can supplement/enhance that of a Canadian-based firm.
• U.S. companies operate in a business climate very similar to that of Canadian firms, making it easy for a Canadian-based company to understand how business is conducted.
• When compared to other countries, the U.S. presents minimal government requirements for foreign companies to meet before doing business there.
• The U.S. offers Canadian-based companies an opportunity to access other regional markets. For example, partnering with a company from the U.S. Northwest could offer access to the newly opening markets of the Russian Far East and the Pacific Rim. Similarly, partnering with a U.S. Midwest company offers an opportunity to access the new markets in Eastern Europe and Mexico.

Canadian-based firms offer a great deal to a U.S. partner.

• Due to the comparatively small size of the Canadian market, Canadian-based firms are export oriented at a much earlier stage in their growth than are similar-sized U.S. firms, which often work exclusively within the domestic market. The international market savvy Canadian companies bring to the table is a valuable asset to an alliance partner.
• Canadian companies have developed world-class technologies in niche sector specializations - something very attractive to U.S. partners.
• Canadian firms offer U.S. partners a similar business culture to that of the U.S. As well, Canadian government requirements are not onerous in comparison to those of other countries.
• Canada's R&D tax credit system is the most generous in the world and is effective in generating technology-based partnering opportunities.
• Canadian-based firms offer U.S. partners linkages with both established and emerging markets, such as those in Africa and Asia.