Benefits and Challenges Associated With Using Strategic Alliances

1483 Words3 Pages

BENEFITS AND CHALLENGES ASSOCIATED WITH USING STRATEGIC ALLIANCES
Over the past years, strategic alliance has been seen as an expansion in globalization and is a known device/mechanism used in the global market by different firms, which is widely accepted. Most leading companies have used different alliances to improve their resources better than their competitors.
Strategy involves planning for the future, is a direction for achieving long term profit through its capabilities and competence. Strategy is a long term commitment.
Strategic alliance is a joint agreement between two or more firms from different countries to co-operate in business and has agreed to share their resources to achieve a strategic objective and competitive advantage. However, the way an initiator of any alliance business positions the business influences its competitiveness.
Most firms enter into a strategic alliance for some key reasons such as; for reduction of risk, for organic growth, for improvement in market, to select out more resources, to create worth and creation of new market, which a single firm might not be able to achieve by standing separately. Firms are also involved in an alliance for technological development and for sharing research and development cost. Despite the benefits involved in the formation and entering international strategic alliance, there are also pitfall, which might prevent the formation and growth of firms, it includes the selection of the right partner, partners been dependent instead creating its own strategy, managing partner's weaknesses and strengths, learning partner's cultural differences. Moreover, some big companies such as computers, telecommunication and biotechnology used different kinds of alliance to improve...

... middle of paper ...

...elps alliance manager to deal with cultural behaviours. When challenges are recognize, they should make an effort to avoid it. Alliance strategy requires the alliance manager to deal with differences in culture by adapting to their cultural dispositions. However conflict must be eliminated and nature of the business, its reason, strategy, should be clearly stated in the new business.

REFERENCES
Johnson,G. , Whittington,R. ,Scholes,K. (2012) Fundamentals of strategy.2nd edn. Harlow;Pearson
Iynch,R.(2012) Strategic Management.6th edn. Harlow;Pearson
Mellahi,K. ,Frynas,G. ,Finlay,P. (2005) Global strategic management. United states; oxford university press
Rugman,A.(2009) The oxford handbook of international business. 2nd edn. United states; oxford university press
Tjemkes,B. ,Vos,P. ,Burgers,K. (2012) Strategic management alliance. United states; Routledge

Show More
Related

  • Texas Chicken Essay

    904 Words  | 2 Pages

    Texas Chicken strategic treaty allows a business to get cutthroat advantage through access to a partner’s capital, including markets, technologies, resources and people. Amalgamation up with others provides balancing resources and aptitudes, making it possible for businesses to develop and increase more promptly and proficiently. Alliances also advantage organizations by lowering production costs and growing and distribute new technologies

    Read More

  • Starbucks Business Level Strategy Essay

    1252 Words  | 3 Pages

    There are four strategies businesses choose from. The first is corporate level strategy which assist companies in selecting new business strategies that is anticipated to increase its worth. Second, is merger and acquisition strategy where two companies assimilate or one company buys out another business. Thirdly, international Strategy concentrated on selling products and services outside of the national market. Finally, cooperative strategy affords companies the opportunity to join forces to achieve a common goal. (Hitt, Reland, Hoskinsson,

    Read More

  • Whirlpool Corporation Case Study

    783 Words  | 2 Pages

    How can firms minimize or manage the bumps, hurdles, or conflicts that often occur when firms join together in an alliance or partnership?

    Read More

  • Tesco Marketing Strategy

    1621 Words  | 4 Pages

    Strategic group analysis aims to identify organizations with similar strategic characteristics, following similar strategies or competing on similar bases.

    Read More

  • The Jet Age: The Jet Age And The Airline Industry

    1036 Words  | 3 Pages

    ...ther competitors by sharing scarce resources including brand assets and market capability, enhancing service quality and, thereby, improving profitability” (2000, p. 137). Airline alliances form to improve companies’ combines value by “(a) achieving or preserving greater economies of scope than they could do individually; (b) improving ‘seamlessness’ of their multiple offering; and (c) increasing their effectiveness by combining frequent flyer programs and airport clubs” (Kahn, 2004, p. 64). These alliances, in turn, expand each member’s routes beyond the normal range and allow for seamless service for customers (Oum et al., 2000, p. 138). None of this would be possible without a free market, however, and after 1978, the airline industry started to see a boom in revenues and inter-firm cooperation after the Airline Deregulation was passed (Smith & Cox, 2008, p. 1).

    Read More

  • Corporate Level Strategy

    1109 Words  | 3 Pages

    Alliances help firms strengthen their competitive position by enhancing market power (Kale and Singh 2009).” It is the role of corporation strategy to be diverse and international in its think unless it violates a core value or strongly held ideology (Hitt, 2015).

    Read More

  • The Pros And Cons Of Strategic Alliances

    736 Words  | 2 Pages

    Although the English language is spoken partners must be able to communicate effectively ensuring messages are conveyed correctly. For example, management styles differ in India and the United States most companies in the United States encourage teamwork and employee input is seen as a positive initiative whereas “Indian companies tend to be much more hierarchical than Western firms, with leaders expecting to micro-manage their staff, who are often discouraged from showing initiative ” (Tapper, 2014, a). In addition, partnership principals and practices may differ in management by regions within

    Read More

  • Business Analysis: Lufthansa Airline

    2483 Words  | 5 Pages

    Hitt, M., Ireland, R. & Hoskisson, R. (2010).Strategic Management: Competitive and Globalization, Concept and Cases. Mason, Ohio: Cengage Learning

    Read More

  • Lufthansa Case Study

    1197 Words  | 3 Pages

    Additionally, deregulation and liberalization has accompanied the globalization of the airline industry, so that companies have had to compete against each other in new markets, as well as to gain entry into new territories. The rise of low cost local and regional airlines has made the competitive environment difficult to maneuver for large, formerly-state-subsidized national carriers. This has resulted in the need for strategic alliances between airlines in order to attempt to protect market shares and profits (Friehe and Curti, n.d.).

    Read More

  • The Importance Of Strategic Marketing

    1484 Words  | 3 Pages

    By definition, strategic marketing is a firm’s ability to concentrate a limited amount of resource on an opportunity that has deemed to have the highest potential to increase sales, thereby creating a sustainable competitive edge over rivals (Brooksbank & Taylor 2007). Fundamentally, each aspect of marketing has the potential to improve or affect the performance of other marketing facets. Hence, creating a proper coordination of a firm’s activities makes it possible to eliminate unnecessary activities that interfere with efficient profit maximization processes. Strategic marketing explores ways that each of the marketing processes will reinforce each other for the best output. More importantly, strategic marketing makes each department to work

    Read More

  • Global Partnership Case Study

    1160 Words  | 3 Pages

    The world markets today are full of international partnerships. Notably, businesses need an overseas partner to help navigate foreign policies, business, and customs. Moreover, cross-cultural partnerships succeed because human resources (HR) have a hand in providing relative information to corporate management in candidate selection. All in all, organizations must analyze the factors that drive companies to international alliances, HR contributes sound advice to the executive management team before joining with potential partners, and HR is making a move toward decision-making process in partner collaboration.

    Read More

  • Importance Of Strategic Alignment

    704 Words  | 2 Pages

    a scarcity of such support can inhibit Strategic Alignment. If the IT managers get understand of the business, Strategic Alignment are going to be enabled. However, a scarcity of understanding of the business by IT management inhibits Strategic Alignment. If the connection between IT and also the business is one in every of a partnership, then Strategic Alignment are going to be enabled. If there 's not a detailed operating relationship between IT and also the business, then Strategic Alignment are going to be restrained.

    Read More

  • Strategic Management and Decision Making

    1872 Words  | 4 Pages

    Strategy formulation is the process of establishing the firm's mission, goals, and choosing among alternative strategies or plans; it involves and implies that preparing the best approach to respond to the circumstances of a firm's environment, whether or not its conditions are known in advance; being strategic and tactical, then, means being clear about the management's aims; being aware of the company's resources, and incorporating both into being consciously responsive to a dynamic environment (SM, 2010). As nearly all businesses have limited resources, top leaders and management must determine which alternative plans or strategies will do well to the organization most; strategic management requires attention to the big picture and the motivation to adapt to circumstances, and consists of the following aspects:

    Read More

  • An Overview of Business Strategies

    2251 Words  | 5 Pages

    ...lopment industry as well as the strengths and weaknesses within the company. The Business Strategy should reflect the main issues that determine the long-term

    Read More

  • Ford Motor Company

    1840 Words  | 4 Pages

    Hitt, M., Ireland, and Hoskisson, R. (2009).Strategic management: Competitive and Globalization, Concepts and Cases. In M.Staudt & Stranz (Ed).

    Read More

More about Benefits and Challenges Associated With Using Strategic Alliances

Open Document