Learn in the textbookLeveraging External Resources and Inter-Company Collaboration
DefinitionAn alliance (アライアンス) is a partnership between companies in which they join forces while remaining independent and supplement each other's management resources.
ExplanationM&A (mergers and acquisitions) brings the other company under your own ownership, whereas in an alliance each company stays separate and simply cooperates. An alliance can include a capital partnership (資本提携) that involves investment, but it stops short of controlling the partner. Because no single company has to shoulder the whole investment in a new business, the partners can share its risk.
AnalogyIt is like two neighboring shops that stay separate businesses but team up to hold a joint sale.
Memory hookThe English word alliance means a pact between allies. Allied nations do not merge into one country, and allied companies likewise cooperate while staying separate.