According to author Charles Hill's views on Global Business Today, "Collaboration between competitors is fashionable; recent decades have seen an explosion in the number of strategic alliances". Indeed, the global economic system is nowadays so complex and the competition is too strong that some companies cannot survive by acting independently despite offering many products and different choices on the global marketplace. In an environment that is constantly changing, elaborating strategic partnerships or alliances can be a really useful strategic decision. Strategic alliances are developing in many industries. We will discuss in which circumstances firms should elaborate strategic alliances in their international operations. We begin by defining strategic alliance in an international context, using different authors' views and opinions. Then, we will see in which circumstances firms should develop such alliances. We will also explain how to choose the right alliance and how to manage "winning" partnerships.
[...] To avoid such situation, we will explain how to elaborate “winning” alliances in the second part I. B. Types of Strategic Alliances In the book “Marketing Management”, the author Philip Kotler, p claims that most of strategic alliances actually take the form of “marketing alliances”: Four main categories are evoked: - Product / Services alliances: When a firm licenses another to manufacture its products, or when two firms jointly market their complementary products or a new product. - Logistic alliances: When one firm offers logistical services for another firm's product. [...]
[...] A. Ronkainen, M. H. Moffett, E. O. Moynihan (2001) Global Business. 3rd ed. U.S.A.: Harcourt College Publishers. C. W. L. Hill (2008) Global Business Today. 5th ed. [...]
[...] ▶ Getting new core values: A company can form some strategic alliances in order to strengthen its core values. For example, the famous sports firm “Reebok” created an alliance with “Amnesty International”. Indeed, “Reebok” sponsored a series of concerts organised by “Amnesty” all around the world to “promote” the cause of Human Rights. It was actually a way for “Reebok” to mention Human Rights as a part of it core values (better image and reputation notably). When this alliance was elaborated, it was perceived as a very strange fit. [...]
[...] For example, “Texas Instruments” and “Hitachi” joined forces to create new “memory chips”, but they realised that the costs were too much important to develop such jet engines together. So they asked powerful aerospace companies to join them. As a result, costs management was made much easier as costs were shared, (according to I. Ronkainen, E. Moynihan, M. Czinkota, M. Moffett, “Global Business”, p. 416). In addition, strategic alliances are an efficient way to facilitate the entry into a foreign market. [...]
[...] International market developments are made much easier (possibility to use existing distribution networks, manufacturing processes, technological methods and so on). Competitiveness should be improved on the long run as well as profits. In addition, strategic partnerships can be a way for firms to tackle competition, as it is possible to block some rival's actions on international markets as we explained. Alliances also allow firms involved to considerably reduce costs and all of the associated risks when launching new products or processes into foreign markets. On the other hand, alliances can help defending a problematic home market. [...]
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