Business alliances in the economy of EU countries

Abstract

The activities of business alliances in the EU are being transformed by the aid of the policy implementation of industrial alliances development, which provides for a wide network formation of stakeholders in reducing the dependence of member states on raw materials of third countries. The purpose of the academic paper lies in assessing empirically the business alliances effectiveness in the EU based on the case studies analysis on creating strategic alliances. Methodology. The case method has been used in the course of the research in order to analyse the activities and effects of business alliances within the established network for cooperation of the European Raw Materials Alliance (ERMA). The results demonstrate the uncertainty in the strategic business alliances effectiveness in the EU; it is difficult to assess the potential quantitative effect from the company’s resources synergy – alliance members in the short-term prospects. Despite the well-established principles, the choice of the alliance management form as joint venture, the company’s market value has decreased. The advantages of the business alliance include the supply chain diversification of of raw materials from Third World countries to EU countries for industrial production. The theoretical and practical research value lies in supplementing the transaction costs theory and the theory of resources, explaining the business alliances creation. In practice, companies - members of business alliances combine the features of both theories in order to take into accounts both costs and synergies from resource integration.