Increasingly, senior executives who wish to expand their company’s product, geographic, or customer reach consider alliances to be the strategic vehicle of choice. In the past five years, the number of domestic and cross-border alliances has grown by more than 25% annually. But the term alliance can be deceptive; in many cases, an alliance really means an eventual transfer of ownership. The median life span for alliances is only about seven years, and nearly 80% of joint ventures—one of the most common alliance structures—ultimately end in a sale by one of the partners.
A version of this article appeared in the January–February 1995 issue of Harvard Business Review.