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PeterSME
08-05-2016, 07:08 AM
Dear all,

Currently, I am writing my thesis for a small tech-SME in the Netherlands, which sells an intangible asset. Part of this thesis is to research which entry mode would be most suitable for the company. This resulted in having a strategic alliance as most suitable choice for my company. Now, I am looking into the financial consequences of forming a strategic alliance, but I can't find much literature regarding the topic. Therefore, my question is quite straightforward:

1. Does anyone of you know written sources with regards to financial consequences of a strategic alliance/export in general?
2. What are your experiences with export and the costs that followed?
2. What are your experiences with a strategic alliance and the costs that followed?

Kindest regards,
Peter

Veltrust
08-08-2016, 09:21 PM
Strategic alliances are more beneficial than they are losses. However, some alliances are only beneficially in the early stages before your company starts gaining a strong foot hold in the foreign market and no longer needs the other business who (in most cases) might have been acting as the middle man. As far as exporting is concerned, it is all profit if the place the product is going to has high demand for you product. Costs which follow export would be shipping (which can be negotiated so the importer pays for a partial amount or incurs the full expense). It all depends on how you write out the agreement with the client you are exporting to. So if the agreement says you will simply ship to their facility then that's all you have to worry about. Another concern is protecting the cargo. A lot of product can be damaged or stolen if not packaged properly. So it is important to make sure your product is packaged in a durable manner to avoid incurring losses and delays which may make the client hesitant. Which brings me to the next point, insure the cargo. Once your product leaves the facility, it is at the mercy of many factors, human and nature. So insuring it allows you to have a peace of mind and also gives the buyer confidence to buy in bulk.