Despite their continuing popularity and value-creation potential, strategic alliances fail as often as they succeed. Alliance failure is often attributed to opportunistic behavior by one or more of the partners. This paper draws upon empirical evidence from a successful alliance – a federated cooperative marketing system – to shed light on some of the economic and behavioral strategies and mechanisms that alliances can use to promote effective cooperation among alliance partners. The paper also shows how the alliance management body can generate the resources needed to develop and implement such mechanisms, and make alliance partners buy into these mechanisms.


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