...Strategic Alliance Abstract Organizations are facing exciting and dynamic challenges in the 21st century. In the globalized business, companies require strategic thinking and only by evolving good corporate strategies can they become strategically competitive. A sustained or sustainable competitive advantage occurs when firm implements a value – creating strategy of which other companies are unable to duplicate the benefits or find it too costly to initiate. Corporate strategy includes the commitments, decisions and actions required for a firm to achieve strategic competitiveness and earn above average returns. The goals of corporate strategy are challenging not only for large firms like Microsoft but also for small local computer retail outlets or even dry cleaners. I hope to offer a concise description of strategic alliances as well as a picture of who is participating in them and why. The states of affairs that encouraged this “rising era of collaboration” will be reviewed and the necessary steps in formulating alliances. Examples of companies that are or were involved in strategic alliances will be discussed, others of which were thriving and the others of which they were not. This paper is not intended to serve as a comprehensive study of strategic alliances. Introduction Corporate alliances, which are now called “strategic”, are in fact not new. Westinghouse Electric and Mitsubishi were allied for seventy years. The alliance between Ford and Mazda dates...
Words: 3401 - Pages: 14
...OpenTravel™ Alliance XML Schema Design Best Practices Version 3.04 June 2006 © 2005 OpenTravel™ Alliance www.opentravel.org/ OpenTravel™ Alliance Best Practices Specification Page 2 1 2 3 OTA XML Schema Design Best Practices............................................................................. 4 XML Standard Specifications................................................................................................. 5 Best Practices.......................................................................................................................... 6 3.1 Scope.............................................................................................................................. 6 3.2 Schema Design Component Parts and Roles ................................................................. 6 4 OTA XML Schema Design Guidelines .................................................................................. 7 4.1 Tag Naming Conventions .............................................................................................. 7 4.1.1 Mixed Case ................................................................................................................ 7 4.1.2 Underscore................................................................................................................. 7 4.1.3 Acronyms................................................................................................................... 7 4.1.4 Word Abbreviations...
Words: 6100 - Pages: 25
...their own boundaries. The concept of strategic alliances has become widely used in the business language to refer to the types of partnerships agreements between two or more companies that pursue a clear strategic collaboration objective, with different levels of possible integration among the members. In today’s competitive global economy strategic alliances are a crucial option for achievement of competitive advantage. By developing strategic alliances, organisations can share their excess or complementary resources and capabilities so as to strengthen their position in the market and gain competitive advantage. When such alliances are effectively and efficiently managed the partnering firms can gain immensely towards mutual profitability. In any cooperative relationship trust is key for success. Where mutual trust and synergies exists, partnering organisations can benefit substantially from opportunities that can be exploited through maximum utilization of combined resources. On the other hand, where there is no trust, extensive monitoring systems become necessary to monitor each partners’ contribution and this results in increased cost of operations that ultimately hamper the competitiveness of the alliance. Definition A strategic alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent. Partners may provide the strategic alliance with resources such as...
Words: 6464 - Pages: 26
...A joint venture is a special type of strategic alliance in that a new business entity is created that is legally separate and distinct from its parents. A primary advantage of a joint venture is that the venture can have a broader purpose, scope, and duration compared to other types of strategic alliances. Moreover, joint ventures tend to be more stable than non-joint venture strategic alliances. Joint ventures in which there is shared management or that are managed by one parent may have difficulties because there may be a tendency to try to please management from the founding companies rather than focusing on what is best for the joint venture. In contrast, non-joint venture strategic alliances are useful because they allow participants to focus on a particular project, yet do so without creating a new entity. Furthermore, non-joint venture strategic alliances can help firms overcome short-term hurdles. The basic benefits partners are likely to gain from their strategic alliances are ease of market entry, shared risk, shared knowledge and expertise, and synergy and competitive advantage. Strategic alliances can ease market entry because they allow firms to overcome barriers such as entrenched competition and hostile government regulations and/or reduce the cost of entry. Strategic alliances can also enable firms to reduce or control exposure to risk. Firms can gain knowledge and expertise via strategic alliances, as well as synergy and competitive advantage. In...
Words: 312 - Pages: 2
...productivity, and, ultimately, reduce company cost for health care coverage. The United States Workplace Wellness Alliance was implemented in 2009 because of the need for wellness programs for corporations. A qualitative search from scholarly, peer-reviewed articles of employee wellness programs was conducted to assess the efficacy of the wellness programs. The results showed promising results of wellness programs, including decrease in company health care cost and increase in return on investments (ROIs). Workplace wellness programs have shown to decrease employee absenteeism, presenteeism, medical cost, and increase productivity. Background Wellness programs are a common part of the modern-day workplace. They were created for companies to cultivate wellness in their employees. Wellness programs are an essential part of corporations for various reasons. The most important reason is that healthy employees lead to greater productivity for a company and, ultimately, more revenue. Over the past few decades, wellness programs have improved. In fact, wellness programs have progressed from offering on-site exercise equipment to offering healthier food choices in the cafeteria and sometimes even having an actual health professional on-site to consult with employees about health concerns. United States Workplace Wellness Alliance The United States Workplace Wellness Alliance was...
Words: 2271 - Pages: 10
...Why Too Many Alliances End in Divorce John W. Medcof Learning, Positioning and Alliance Partner Selection What do General Motors, Norsk Hydro, Matsushita Electric Industries, A T & T , Rh6ne-Poulenc Rorer, Rubbermaid Inc., Olivetti, Syntex, Daewoo Motors and Coors Brewing C om pany all have in com mon? T h e y have all participated in international strategic alliances w h i c h e n d e d in divorce. 1 Such divorces are not u n c o m m o n 2 but they have failed to d a m p e n the enthusiasm of corporations for alliances as a m o de of doing business. Between 1988 and 1992 over 20 000 business alliances were formed in the USA alone, contributing to the 25% annual rate of increase in alliances since 1985. 3 In surveys of its members over the last few years the Industrial Research Institute has f o u n d that, in each year surveyed, b e t w e e n 45% and 49% of r e s p o n d e n t s have projected increasing their alliance participation. 4 The enthusiasm for alliances is partly driven by numbers w h i c h show, for instance, that alliances o u tp e r f or m more traditional forms of business activity by over 50%. 5 Despite the enthusiasm and despite the favourable numbers, though, the i n c i d e n c e of expensive and messy alliance failures is surprisingly high, and a reality that alliance 'players' must consider seriously. Although there are m any reasons for alliance failures, m a n y writers agree that poor selection of alliance partners is among the most i m p o r t a...
Words: 9982 - Pages: 40
...Management of Strategic Alliances: Performance Evaluation Where to Link in the Value Chain? • Alliance combining same value-chain activities are to gain efficiencies, merge talents, or share risks • In operations alliances firms combine manufacturing activities to reach economies of scale • Operations/marketing alliances provide access to markets Identification of the links in VC forms the basis for performance of the SA Negotiation & Performance • The formal agreement is not as important as the ability of managers to get along • Negotiation issues • equity contributions • management structure • “prenuptial” agreements Selected Questions for a StrategicAlliance Agreement Design & Performance • Depends on the type of alliance chosen • Informal CAs often have no formal design issues • Formal CAs may require separate organization unit housed in one company • JV—Parent companies set up separate legal entity Decision-making Control • Two areas need to be considered: • Operational decisions (focus on day to day running) • Strategic decisions (focus on long term survival) • Majority ownership does not necessarily control • In JVs, strategic decision making takes place at the level of JV’s board of directors or top management. Management Structures • Dominant parent: controls or dominates strategic and operating decision making • Often has majority ownership • Treats the JV as wholly owned subsidiary • Shared management: both parent companies contribute approximately...
Words: 1160 - Pages: 5
...Interfirm alliances in the small business: The role of social networks BarNir, Anat; Smith, Ken A. Journal of Small Business Management40.3 (Jul 2002): 219-232. Abstract (summary) In light of the increasing importance of strategic alliances in shaping competition, this study explored whether the social network of small firm executives can be leveraged to facilitate the establishment of interfirm alliances. Analyses are based on a mail survey of 149 small manufacturing firms in the northeast US. Results indicate that the social networks of senior executives account for 11%-22% of the variance in the degree to which firms engage in alliances, depending on the type of alliance. Results also show that the number of interfirm alliances is positively related to several networking properties (propensity to network, strength of ties, and network prestige). Findings are discussed in the context of network theory, social embeddedness, and the overall implications for management researchers and practitioners. Full text In light of the increasing importance of strategic alliances in shaping competition, this study explored whether the social network of small firm executives can be leveraged to facilitate the establishment of interfirm alliances. Analyses are based on a mail survey of 149 small manufacturing firms in the northeast United States. Results indicate that the social networks of senior executives account for 11-22 percent of the variance in the degree to which firms engage in alliances...
Words: 6620 - Pages: 27
...Interfirm alliances in the small business: The role of social networks BarNir, Anat; Smith, Ken A. Journal of Small Business Management40.3 (Jul 2002): 219-232. Abstract (summary) In light of the increasing importance of strategic alliances in shaping competition, this study explored whether the social network of small firm executives can be leveraged to facilitate the establishment of interfirm alliances. Analyses are based on a mail survey of 149 small manufacturing firms in the northeast US. Results indicate that the social networks of senior executives account for 11%-22% of the variance in the degree to which firms engage in alliances, depending on the type of alliance. Results also show that the number of interfirm alliances is positively related to several networking properties (propensity to network, strength of ties, and network prestige). Findings are discussed in the context of network theory, social embeddedness, and the overall implications for management researchers and practitioners. Full text In light of the increasing importance of strategic alliances in shaping competition, this study explored whether the social network of small firm executives can be leveraged to facilitate the establishment of interfirm alliances. Analyses are based on a mail survey of 149 small manufacturing firms in the northeast United States. Results indicate that the social networks of senior executives account for 11-22 percent of the variance in the degree to which firms engage in alliances...
Words: 6620 - Pages: 27
...Kale and Singh 45 A R T I C L E Managing Strategic Alliances: What Do We Know Now, and Where Do We Go From Here? by Prashant Kale and Harbir Singh Executive Overview Alliances present a paradox for firms. On the one hand, firms engage in a large number of alliances to secure and extend their competitive advantage and growth; on the other hand, their alliances exhibit surprisingly low success rates. In this paper, we discuss how firms can address these failures by identifying some of the primary drivers of alliance success. First, we discuss how firms can achieve success with any individual alliance by considering critical factors at each phase of the alliance life cycle. Second, we show how firms can increase their overall alliance success by developing and institutionalizing firm-level capabilities to manage alliances. Third, we highlight emerging issues in the alliance context, including the need to recognize a new class of alliances between firms and not-for-profit organizations or individuals, the benefits of taking a “portfolio approach” to alliance strategy and management, and the opportunity to transfer one’s alliance capabilities to the effective management of other interfirm relationships, including acquisitions. I The Alliance Paradox n the last two decades, alliances have become a central part of most companies’ competitive and growth strategies. Alliances help firms strengthen their competitive position by enhancing market power (Kogut...
Words: 11145 - Pages: 45
...Chapter 9 1. One of the most common entry strategies for MNCs is the joint venture. Why are so many companies opting for this strategy? Would a fully owned subsidiary be a better choice? 1） wholly owned subsidiary is an overseas operation that is totally owned and controlled by an MNC. This option is often pursued by smaller companies, especially if international or transaction costs, such as the cost of negotiating and transferring information, are high. When MNCs make an initial investment in the form of a wholly owned subsidiary in a foreign country, it is sometimes referred to as “greenfield” or de novo (new) investment. The primary reason for the use of wholly owned subsidiaries is a desire by the MNC for total control and the belief that managerial efficiency will be better without outside partners. Due to the sole ownership, it has been found that profits can be higher with this venture and that there are clearer communications and shared visions. However, there are some drawbacks. Typically, wholly owned subsidiaries face a high risk with such a large investment in one area and are not very efficient with entering multiple countries or markets. This can also lead to low international integration or multinational involvement. Furthermore, host countries often feel that the MNC is trying to gain economic control by setting up local operations but refusing to include local partners. Some countries are concerned that the MNC will drive out local enterprises...
Words: 1766 - Pages: 8
...Task 1 1. Key issues influencing future industry growth (TEMPLES) Factors Issues Nature of impact Impact on future industry growth Technology Influence aircraft design to reduce turnaround time & passenger density, especially for long-distance routes in order to reduce costs and increase efficiency. New technologies like online booking, flight software Positive Positive Low / Medium low Economic Global Financial Crisis exploded in 2008. The world economic recovery is still facing uncertainties. Negative Medium Market Declining trend in terms of older-style, full-service airline demands. Customers are more price-sensitive. Negative Medium The Asian market is really growing compared with the stagnant markets in North America and Europe. Positive Medium Politics Asia is not at a stage in terms of a common single market and is subject to different restrictions in different countries. Negative Low / Medium Law Very complex in terms of cross-border ownership laws. Negative Low / Medium Society An ongoing trend for greater environmental concerns. Especially people with a high awareness for global warming try to travel environmental friendly and are looking for suitable travelling substitutes. An increase in services to leisure destination lifestyle of the new generation. In today’s fast-paced global business environment, timetables took precedence over service and for a discerning business traveler, scheduling is critical. Negative Medium Overall...
Words: 3785 - Pages: 16
...Managing Knowledge for Innovation: The Role of Cooperation, Competition, and Alliance Nationality Haisu Zhang, Chengli Shu, Xu Jiang, and Alan J. Malter ABSTRACT Strategic alliances play a critical role in global innovation. Firms can overcome resource constraints and achieve superior innovative performance not only by using internal resources but also by acquiring knowledge-based capabilities from alliance partners. In this study, the authors investigate how knowledge acquired from alliance partners affects organizational knowledge creation, which in turn leads to innovative performance. The authors propose that the knowledge–innovation relationship is stronger in international alliances than domestic alliances. The results from a survey of 127 German firms engaged in strategic alliances confirm that knowledge creation mediates the effect of knowledge acquisition on innovative performance and that international alliances strengthen the effect of knowledge creation on innovative performance. In addition, the authors find that interfirm cooperation and competition coexist in strategic alliances and that both factors increase knowledge acquisition, though from different motivational bases. Keywords: innovation, strategic alliance, knowledge management, cooperation, competition A lliances are a central element of most company business models (Kaplan, Norton, and Rugelsjoen 2010). The logic of working with a strategic partner is especially compelling in increasingly competitive...
Words: 12885 - Pages: 52
... government of different nations or the people. Globalization is the process of our age in which we live. It affects all aspects, from companies, people and consumers to corporate world and cultural relationships like world views, ideas and other aspects of culture. (Stanley J. Paliwoda 2009). It also includes some other aspects like advances in transportation, telecommunication, infrastructure, telegraph and its breed the internet. Globalisation removes trade barriers and allows free trade in this electronic age which brings reduction in government’s restrictions covering international trade and also increases communication speed. The four phases in the phase model of globalization are, exporting, cooperative contracts, strategic alliances and wholly owned affiliates. (McWilliams 2010) The word export means shipping the goods and services anywhere out of the boundaries of a country. The one who ships the item is known as ‘exporter’ and the overseas buyer is known as an ‘importer’. Exporting is been increasing ever since globalization began. It is estimated that in today’s globalized world the value of global trade in form of exports and imports is expected to be more that $12 trillion. World trade has grown at more rapid rate than world productivity. (BusinessVictoria 2008). There are many advantages of exporting, two of them are it increases sales and profit. Removing the trade barriers allows a company, organisation or an individual to serve their goods and services...
Words: 1601 - Pages: 7
...cooperative strategies? Cooperative strategies are used to gain competitive advantage by joining with one or two competitors against other competitors of the industry. The two general types of cooperative strategies are collusion and strategic alliance business. They include: Collusion- the active cooperation of firms within an industry to reduce output and raise prices to avoid economic law of supply and demand Strategic Alliances- a long-term cooperative arrangement between two or more independent firms or business units that engage in business activities for mutual economic gain Used to: - Obtain or learn new capabilities - Obtain access to specific markets - Reduce financial risk - Reduce political risk 2. What are the types of alliances that business can engage in? * Joint Venture Strategic alliance in which two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage. * Mutual Service Consortia A type of strategic alliance in which two similar companies from the same or similar industries pool their resources to receive a benefit that would be too difficult or expensive for either to obtain alone. * ...
Words: 914 - Pages: 4
