The equity strategic alliance is jointly established by each member as a shareholder, with independent assets, personnel and management authority.Ownership alliance generally does not include the core business of each member, which can be divided into the equal occupying strategic alliance and Mutual shareholding strategic alliance .Equal occupying strategic alliance refers to the joint venture production and operation of the project subordinate to the local function of the alliance members, both parent companies have 50% equity to maintain relative independence.

　　 In order to consolidate a good cooperative relationship, the alliance members in the Mutual shareholding strategic alliance hold each other a small number of shares for a long time. Unlike joint ventures, cooperation or mergers, this approach does not involve the merger of elements such as equipment and personnel .IBM bought a small stake in software and computer services companies in about 200 western European countries in 1990 and 1991，Thereby establishing a good alliance with local distributors,and thus occupy the market with the help of middlemen in the alliance.

Equity type strategic alliances include：

• Joint venture.
  

• Mutual shareholding etc.
  

  
  

    Compared with the equity  strategic alliance, the contractual alliance has the essential characteristics of the alliance because of its more emphasis on the coordination and tacit understanding of the relevant enterprises.It has greater advantages than equity strategic alliance in terms of operational flexibility, autonomy and economic benefits:

Ⅰ.The equity  strategic alliance require the formation of economic entities with legal person status, which have strict regulations on resource allocation, capital contribution ratio, management structure and interest distribution.However, the contractual strategic alliance does not need to form an economic entity and a fixed organizational structure, and its structure is relatively loose. In a sense, and the agreement itself is in a sense a "memorandum of intent" without restriction.

Ⅱ.The equity  strategic alliances are divided into primary and secondary according to the proportion of each party's investment, and has a clear stipulation on each party's capital, technical level, market size, staffing, etc. The size of equity determines the size of the right to speak.However, all parties to the contractual strategic alliance are generally in an equal and interdependent position and relatively maintain their operational independence.

Ⅲ.In the distribution of benefits, the equity-type strategic alliance is divided according to the proportion of capital contribution, and the interests of the parties to the joint venture are reflected in the final distribution.In the contractual strategic alliance, each party can carry out business activities in its own work link according to its own situation and obtain its own interests.

Ⅳ.The initial investment of the equity strategic alliance is large, the Switching  cost is high, it is difficult to evacuate, the flexibility is poor, the risk is great, the government policy restriction is also very strict, and the contract strategic alliance can avoid these problems.

    At the same time,the equity strategic alliance is conducive to expanding the financial strength of enterprises, And through the form of " owning" the other party in part , enhance the trust and responsibility of both sides, cooperation can be more lasting.The inherent shortcomings of the contractual strategic alliance lie in the poor control ability of the enterprise over the alliance, the lack of stability and long-term interests of the loose organization, the insufficient communication among the members of the alliance, the inefficiency of the organization, and so on.When the partial combination achieved by the alliance cannot solve many problems, the part of the enterprise participating in the alliance cooperation and the part not participating in the alliance have no clear boundary,  the contract form is transformed into the equity type.In an equity alliance, you can often see one party buying the other.This does not mean that the alliance has failed, that the alliance may have been successful, but that the strategic objectives of the parties involved in the alliance are different.