International Business Alliances, Use Today
In order to improve revenue and maximize competitive advantages, corporations have often sought to form alliances of a strategic nature (Eppler & Comi, 2009). The nature of these alliances varies and when related to a new geographic market or across national boundaries, they are considered international, strategic alliances. The profits and costs incurred in their operations are shared equitably as the agreement allows the each corporation to penetrate overseas markets. Members in the alliance choose partners whose contribution will enable them to achieve their anticipated goals.
An international, strategic alliance offers several advantages to both corporations; increased sales and instant market access. With entry into a new market, it is likely that there will be a rise in sales as the corporation that already exists in an overseas country strengthens your position in the market. An increase in skills, technology and human resource allows for the efficient development of new products at a profit with an expansion of distribution channels (Eppler & Comi, 2009). The alliance resulted from the need to better communication all over the world and combined two key players in the market of electronic engineering. Siemens operates in the field of electronic engineering and electronics, operating in the healthcare and energy sectors ("Siemens," 2012).
[...] A weaker management system from either party is likely to deter the operations of the other resulting in difficulties, in meeting targets. Communication and resource allocation must also be done in an efficient manner or else one party may feel that the other is taking over their market presence (Eppler & Comi, 2009). Such fears my hamper the whole organizational setting and prevent corporations from freely participating in such alliances. These arrangements may also suffer from some factors that may not have been projected during the creation of the strategic alliance. [...]
[...] International Business Alliances in Use Today In order to improve revenue and maximize competitive advantages, corporations have often sought to form alliances of a strategic nature (Eppler & Comi, 2009). The nature of these alliances varies and when related to a new geographic market or across national boundaries, they are considered international, strategic alliances. The profits and costs incurred in their operations are shared equitably as the agreement allows the each corporation to penetrate overseas markets. Members in the alliance choose partners whose contribution will enable them to achieve their anticipated goals. [...]
[...] The operating costs may also increase in the overseas country making it uneconomical for production. Employees who have also been sent as expatriates to overseas branches may begin working against the interests of the parent corporation, making it difficult to control the overall direction of business. In 2005, Germany's Siemens AG and China's Huawei Technologies formed an international, strategic alliance that would allow them to develop products based on China's third generation wireless standard SCDMA. Their alliance venture, TD Tech Limited, is based in Hong Kong with Siemens having 51 percent equity. [...]
[...] (2012). Huawei Technologies Company Limited. Retrieved November Siemens. (2012). Siemens. Retrieved November from Siemens.com (2012). Siemens. [...]
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