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Suntricity is a solar shingle manufacturer that creates high efficiency solar panels for commercial buildings. They have struggled with growth recently due to a highly technical installation process, declining government subsidies, and increased competition. Most solar shingle producers manufacture their proprietary solar shingles and sell them to wholesalers, builders, and installers.

While there are only a few large shingle ranufacturers, there are hundreds of solar installation and service firms. The market leader is Roof Power Incorporated $($RPI$).$ RPI consistently leads their industry despite selling virtually identical products with what appears to be similar service and support. RPI buys Suntricity shingles and a variety of other solar products from a wholesaler.

Describe the two potential benefits for Suntricity in allying with RPI.

What type of alliance should Suntricity seek with RPI $-$ contractual $($strategic$)$ alliance or equity alliance?

Describe the strategic rationale for entering the alliance.

NOTES:

A contractual alliance or strategic alliance is a contractual arrangement between the parties $($venturers$),$ setting out the terms of their co$-$operation in relation to a particular venture. No separate legal entity is created.

Equity alliances are alliances in which some form of shareholding exists, are used with some regularity. Three forms of equity alliances exist: joint ventures; minority stakes; and cross$-$shareholdings.

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