Strategic alliances are very common now as a model for business co-operation between large companies. Over the past 20 years they have attained the status almost of an ideology in technology-driven business sectors such as motor vehicle manufacture, airline operation and pharmaceuticals (Matthews 1999). In this section, these questions about strategic alliances are answered:
 What are strategic alliances?
 Why companies choose strategic alliances?
 What are the popular perspectives on strategic alliances?
 Why do strategic alliances fail?

3.2.1 Definition of Strategic Alliances

There are many definitions of strategic alliances. It is difficult to define it accurately. Matthews (1999) defines strategic alliance (SA) is "an agreement between two or more ‘partner’ organisations, committing them to pool their efforts and resources in some way". The level of agreement can be either ‘overall business’ or project-based, but stops short of requiring full commitment by the partners, so allowing them each to retain their separate identity. And Wheelen and Hungar (2000) define it as "an agreement between firms to do business together in ways that go beyond normal company-to-company dealings, but fall short of a merger or a full partnership". The definition given by Phan and Peridis (2000) is a kind of long term, trust-based relations that entail highly relationship-specific investments in ventures that cannot be fully specified in advance of their execution. Simply, strategic alliances are a type of co-operation or collaboration between companies to achieve mutual benefits.

In many cases, the term 'joint venture' is regarded the same as strategic alliances. These two definitions are slightly different. In America, joint venture alse can be used as joint venture company, in the context of a separate business entity created by two or more partners. But in UK, joint ventures are not regarded as separate entities. Rather, a joint venture usually is organised as a partnership or through a jointly owned corporation (Hall 1984), which is the same as strategic alliances.