Organizations in India are struggling to react quickly to ever‐changing customer expectations and needs while struggling with shifting market needs and financial swings. The strategy of connectivity to other people and entities is now crucial for innovation and overall success. Businesses today must propagate connections that provide resources they don’t possess in house and enable them to move quickly to profit. Conducting business in the twenty‐first century, therefore, requires forming partnerships and strategic alliances—both internally and externally. Strategic Management is concerned with maximizing an organization's competitive advantage. Strategic alliances can contribute to the success of a business and are beneficial when maintained with efficient management. In the current economy markets are constantly changing, making it increasingly difficult for one company to stay current on all technologies, resources, competencies, and information needed to be successful in those markets. Strategic alliances provide an option for companies to access new markets, expand geographic reach, obtain new technology, and complement skills and core competencies relatively fast. This paper explores the concept of strategic alliance and the benefits and risks and also tries to investigate why individual company should resort to strategic alliances, what are the factors affecting effectiveness of strategic alliances and identified a few cases of strategic alliance in India Strategic alliances are now considered a key source of competitive advantage for companies and have allowed them to cope with increasing organizational and technological complexities that have emerged in the global market.