Strategic Alliances and Joint Ventures: The Stepping Stones to M&A
By: Noel C Ducusin
Mergers and Acquisitions as a Growth Strategy
Mergers and acquisitions (M&A) are powerful tools for driving growth. They enable companies to expand their reach, add new capabilities, and strengthen their market position. A merger combines two separate businesses into one. An acquisition gives one company full control over another. Some mergers are horizontal (between competitors), vertical (within a supply chain), or conglomerate (across unrelated industries). But companies rarely jump straight into M&A. More often, they start with smaller, lower-risk partnerships that can grow over time.
The Spectrum of Corporate Combinations
There are different levels of partnership, each with its own level of commitment:
Merger – Two companies combine into a single entity.
Acquisition – One company buys and controls another.
Joint Venture (JV) – Two or more companies create a new entity, share equity, and split risks for a specific project.
Strategic Alliance – Companies collaborate without creating a new entity or sharing ownership. This is the most flexible and least formal arrangement.
Why Companies Choose Alliances and JVs to Grow and Scale
Alliances and JVs give companies practical ways to grow without the upfront risk of a full buy-in.
Some practical examples include the following:
Shared Risk – A fintech startup with a cryptocurrency prediction algorithm partners with a bank. The startup gains credibility and funding; the bank tests innovation without betting everything.
Access to New Markets – A global security camera maker partners with a local distributor to enter a new country quickly.
Combining Resources – A fitness tracker company links with a health app developer, creating a stronger combined product.
Speed to Market – A bank wanting to launch peer-to-peer payments works with an established payment processor instead of building its own system.
When Not to Use an Alliance or JV
Alliances and JVs aren’t always the right move. Avoid them when:
You need full control over operations, brand, or intellectual property.
Your partner’s culture or strategy clearly clashes with yours.
Regulatory or compliance hurdles are too heavy.
Speed is critical and coordination will cause delays.
You’d risk exposing core technology or trade secrets without protection.
In these cases, a direct acquisition or building in-house capabilities is the safer, faster option.
The Strategic Value of Partnerships
Strategic alliances and JVs give companies a practical middle ground between going solo and a full merger. They let businesses test ideas, share costs, and build market presence without jumping straight into an all-or-nothing deal. Managed well, they can serve as stepping stones to long-term growth.
About the Author
Atty. Noel C. Ducusin is the senior and founding partner of the N. Ducusin & Partners Law Offices - a law firm based in Metropolitan Manila, Republic of the Philippines that specializes in Mergers & Acquisitions, Cross Border Regulatory Matters, Investments and Corporate Advisory.
Atty. Ducusin is also the President & Director of DoingBusinessPH OPC - a company dedicated to empowering foreign investors to do business in the Philippines through online executive education resources, digital books, seminars, as well as online and offline events.
His mission for this Community is to help foreign investors, business owners, and managers by breaking down complex legal concepts and dense technical material into simple, straightforward, and actionable legal information for better business decisions. For easy reading, articles and briefs will be in simple everyday language without legal jargon.
This is not the place for academic writing and legalese will not be tolerated here.
The simpler and the more practical the better.
“Everything should be made as simple as possible, but no simpler.” – Albert Einstein