Abstract

International strategic alliances (ISAs) are one of the partnership options that may be used by firms in achieving their goals. It is an inter-firm cooperation where firms commit some of their resources and capabilities towards the alliance to create a competitive advantage. Yemeni services industry need to improve its competitiveness and the quality of services it provides to the people and therefore, forming a strategic alliances with foreign partners is considered as one of the best strategies. Although the involvement of Yemeni’s service firms in ISAs are evidence, but there is no previous study conducted to determine whether these alliances do create value to the firms or not. Therefore, this study is conducted with the objectives of determining whether Yemeni’s service firms’ involvement in ISAs do create value to the firms or not, and what kind of value creation outcomes are created by this ISAs. Alliances may also come in various forms with different degree of cooperation. This study will also look at the influence of the degree of cooperation in ISAs on the value creation outcomes. Survey of 214 service firms’ managers revealed that ISAs do create value to the organization with financial value top the list. Improvement in customer service and better return on investment (ROI) are among the most important advantage gain by these service firms from their involvement in ISAs. This study also posits a significant positive relationship between the degree of cooperation in ISAs and the value creation outcome.

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