Vertical complementary strategic alliances CSA and horizontal CSA, competition response strategy and uncertainty reduction strategy are the four forms. The differences are that in CSA vertical form the partnering firms will make use of resources as per different levels of the value chain. On the other hand , in the case of the Horizontal CSA, they make use of capabilities from only the same stage in value chain. A competition response is focused on initiating competitive actions, and the uncertainty reduction focuses on entering newer markets and economies equipped with knowledge.
Business closure, business acquisition and business start-up are the three choices. Business closure is the act of closing a business unit when it no longer meets profits; business acquisition is where another business is acquired as a form of expansive strategic choice. On the other hand, a business start-up is where a totally new unit is created.Cross border strategic alliances are used by businesses to make their expansion into international waters much more efficient. This is done by mergers and acquisitions.
Cost minimization is where the partner relationships are formalized and the cooperative strategy controls how partners behave in order to minimize costs and also prevent opportunistic behaviours. In the case of opportunity maximization, the partnership exists for the purpose of creating opportunities for one another. Less formal roles are assumed here as compared to the more rigid setup of the cost minimization strategy. Here the focus of both the partners is on how to learn and how to improve. Necessary firms might also be required to balance between both ends for efficiency.
Four main factors are identified as the determinant for national advantages and these four factors are that of the firm strategy, the structure and rivalry within the domestic market, the supporting industries within the market and the demand conditions. Each of these determinants would have a direct impact on why an organization strategizes to enter international markets and also what form of a strategy it chooses. The firm strategy will be a determinant, especially if the firm is following an expansion strategy and has been successful for long now. Secondly, when there is rivalry in domestic markets, then it means the firm will have to be intensely competitive with respect to prices, hence at this point, if the firm was to find rewarding international market opportunities, it would be able to competitively control the costs. When there are supporting industries in the national market that the company could take advantage of internationalize then they should do so. Finally, if the com pany is making a successful product, that either has no demand international, or had demand early on but later demand declines, then the company can move on to international markets.