Question

why would a U.S. firm use a cross-border strategic alliance with a company in mexico? what advantages does each side gain?

Answer 1

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A US firm would most likely use a cross-border strategic alliance with a company in Mexico because:-

1. This type of alliance provides fewer challenges than the process of merger or acquisition, while, providing the same functionality as an acquisition. It is also easier than the process of merger.

2. This allows a company to target a newer market which might have similar needs but lesser constraints than the ones in the present market.

3. To gain a competitive advantage in the outside market which might have a potential customer base.

4. This type of alliance will likely help the firm grow and expand into the new market essentially allowing it to leverage the resources of the other company and still be able to operate from. Their own home base.