Forming strategic alliances business essay
Management often underestimates how much time and energy should be committed to managing a strategic alliance. A strategic alliance can also expose a company to its partners, and any unique technologies that they may have are revealed to the partner company, which could later become a competitor or could utilize the information obtained during the alliance to their own benefit.
Importance of strategic alliance in international business
Forming Licensing and partnership agreement with retailers, so Starbucks could sell their coffee in the different location e. Contract manufacturing allows the corporation to separate the physical production of goods from the research and development and marketing stages, especially if the latter are the core competencies of the firm. Building Successful Strategic Alliances. Strategic thinking is the approach in which group in an organization think about, access, view, and creates the future for themselves and their associates. Alliances can allow companies to avoid controls on importation and overcome barriers to commercial penetration. The process of creating a strategic plan involves analyzing the prevailing business market, setting goals and mapping out a course that will indicate how the business would work to achieve those goals Since its foundation in , the company has come a long way and today it operates in 17 countries and has 25 paint manufacturing facilities in the world. Understanding the advantages and disadvantages of the partnership is critical to the success of a strategic alliance and the business On the other hand, the strategic intent can lead managers concentrate on establish new capacity to explore further opportunities. Establishing an efficient relationship between client and counsellor is one of the key aspect in counselling. The brand is also marketed in Europe, Asia and has recently ventured the African market with the establishment of a distribution depot in South Africa Generally, strategic intent is a compelling statement about where a corporation expects that succinctly conveys a sense of what the company desires to accomplish in the long term As is true for mergers and acquisitions, a business plan should always precede concerns about how the transaction should be structured. There are a number of key advantages which can result from the implementation of a strategic alliance which is why they are a common feature of business today. An ideal partner should represent a company whose cultures and core strengths are complementary to the business seeking the alliance.
In recent years, economic, political and social changes have made the global environment more uncertain, forcing Coke to reevaluate its strategy, structure and culture to maintain a competitive advantage. History is the antecedents to strategy development that include embedded, stories, symbols, power, structure, controls, rituals and routines refer appendix Emirates CEO, Tim Clark specified that he has been closely monitoring Qantas until he saw an opportunity for both companies through a strategic alliance, mentioning that Qantas had a problem with its international segment where Emirates could help with Joyce, This process also gives companies included in the alliance the opportunity to create contractual safeguards, discuss agreements and risk.
However, this attitude can cause overemphasis on existing resources and current opportunities.
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. Discuss the advantages and disadvantages of strategic alliances.
Objectives or purpose for strategic alliance
Similarly it faces only one set of customers even though a company has a different segments in the market. Fuji Xerox is a successful company which specialises in manufacturing and developing copiers and laser printers. Throughout this paper I will be examining the driving forces behind strategic alliances looking predominately at the motivations behind the formation of a strategic alliance and the idea of a multi company alliance This could be through the form of greater market access, cost and risk sharing, as well as access to core competencies. The Houston Public Library can benchmark those companies that have demonstrated strategic thinking to resolve parallel issues. Although the formality of strategic alliances can vary, they usually have a formation process which involves five steps. Contract manufacturing provides many companies, especially in developing countries, the opportunity to gain the necessary experience in product design and manufacturing technology to allow them to function in world markets.
For the author, there are five key issues related to the study of strategic alliances. Toyohiro Kono attributes the appeal of alliances to the group orientation of Japanese firms, as opposed to independence that characterizes Western firms.
This also helps to increase the economies of scale by increasing the production volume of the product, whereas differentiation strategy is some strategy where the companies produces the unique and quality products to increase its market share value which gives competitive advantage to the company when compared to other companies These alliances were used to repel enemy combatants and create a hostile perception to any group that might think of attacking their regions.
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