INTERNATIONAL ESTRATEGIC ALLIACE

STEPHANIE JOHANA GASTELBONDO CALDERÓNCOD: 1520102028

ALEXI SAMPERCOD: 1520111046

INTERNATIONAL BUSINESS I

INTRODUCTION

Forms of foreign market entry strategies move along a of choice factors such as control, risk, investment intensity, and potential profitability, starting from an export activity and continuing with licensing (franchising, foreign manufacturing, contract production) and various forms of FDI (portfolio investments, JVs, M&A, and greenfield investments), and concluding with strategic alliances options.

CONCEPT

Co-operative relationships between two companies even competitors that have decided to share resources to undertake a specific, mutually beneficial project and achieve mutual goals while remaining independent organizations and maintain theirs autonomy . • Less involved and less permanent than

a joint venture.

CHARACTERISTICS OF ACTUAL STRATEGIC ALLIANCES

Strategic alliances are currently gaining in popularity, partly due to the characteristics of the agreement (namely maintaining independency while pooling forces together to achieve a common goal) and partly due to market globalization conditions that require access to resources and networking structures of a much larger scale and scope than ever before.

FACTORS PROMOTING ALLIANCESStrategic alliances help companies:• To find new market entries.• To shaping of industry evolution.• To develop a more effective process.• To expand into a new market or

develop an advantage over a competitor.

• Learning and applying new technologies.

• To rounding out a product line.• To among other possibilities.

ALLIANCE PROCESS

TYPES OF STRATEGIC ALLIANCESCollaborative agreements between businesses can take a number of forms and are becoming increasingly common as businesses aim to get the upper hand over their competitors. The main types of strategic alliances are listed below:• Profit strategic alliances• Nonprofit strategic alliances

• Joint Ventures • Franchising

• Outsourcing: The 1980s was the decade where outsourcing really rose to prominence, and this trend continued throughout the 1990s to today, although to a slightly lesser extent.

• Affiliate Marketing: Affiliate marketing has exploded over recent years, with the most successful online retailers using it to great effect. The nature of the internet means that referrals can be accurately tracked right through the order process. Amazon was the pioneer of affiliate marketing, and now has tens of thousands of websites promoting its products on a performance-based basis.

• Technology Licensing: This is a contractual arrangement whereby trade marks, intellectual property and trade secrets are licensed to an external firm. It’s used mainly as a low cost way to enter foreign markets. The main downside of licensing is the loss of control over the technology – as soon as it enters other hands the possibility of exploitation arises.

• Product Licensing: This is similar to technology licensing except that the license provided is only to manufacture and sell a certain product. Usually each licensee will be given an exclusive geographic area to which they can sell to. It’s a lower-risk way of expanding the reach of your product.

• R&D: Strategic alliances based around R&D tend to fall into the joint venture category, where two or more businesses decide to embark on a research venture through forming a new entity.

• Distributors: If you have a product one of the best ways to market it is to recruit distributors, where each one has its own geographical area or type of product. This ensures that each distributor’s success can be easily measured against other distributors.

• Distribution Relationships: This is perhaps the most common form of alliance. Strategic alliances are usually formed because the businesses involved want more customers. It’s a win-win agreement – the bank gains through offering a great deal to their customers, the insurance company benefits through increased customer numbers, and customers gain through receiving an exclusive offer.

DIFFERENCE BETWEEN STRATEGIC ALLIANCE JV

Milly, Fred and James are all naturopaths located in different areas around a city.They decide to get together to help each other with promotion. They do a number of things together. They share a stand at an expo, they run a shared advertisement in a natural therapies magazine. They even do purchasing together to reduce costs. All these are alliance strategies.

The Joint Venture however over the course of their relationship as Milly, Fred and James get to know and trust each other they start to discuss new opportunities and they see the potential of offering natural therapies treatments to rural locations. So they decide to set up a Joint Venture to open a mobile natural therapies clinic to visit rural towns.

ADVANTAGESStrategically it is a strong alliance when is composed with the best in each field and the resulting solution is stronger than any of the part.

• Get instant market access, or at least speed your entry into a new market.

• Exploit new opportunities to strengthen your position in a market where you already have a foothold.

• Increase sales.• Gain new skills and technology.• Develop new products at a profit.• Share fixed costs and resources.• Enlarge your distribution channels.• Broaden your business and political contact base.• Gain greater knowledge of international customs and culture.• Enhance your image in the world marketplace.

DISADVANTAGESThere are some inevitable trade-offs to consider:

• Weaker management involvement or less equity stake.

• Fear of market insulation due to local partner's presence.

• Less efficient communication.• Poor resource allocation.• Difficult to keep objectives on target over time.• Loss of control over such important issues as

product quality, operating costs, employees, etc.

EXAMPLES

For example, an oil and natural gas company might form a strategic alliance with a research laboratory to develop more commercially viable recovery processes. A clothing retailer might form a strategic alliance with a single clothing manufacturer to ensure consistent quality and sizing. A major website could form a strategic alliance with an analytics company to improve its marketing efforts.

AIRLINE ALLIANCE

WIN - WIN

WHY SKYTEAM?Ease of travelAs you make your way from country to country and city to city, our 19 member airlines are dedicated to help make your journey smoother and simpler.Global coverageWith over 15,000 daily flights to 1,000destinations in 187 countries, the SkyTeam network offers you more destinations and more connections from the best hubs in the world.

Air France has routes from America to Europe, Delta has domestic flights in USA while KLM is the airline of the Netherlands, countries like Norway, Sweden and other uncommon routes.Example If I want to travel from Paris to NY and then need to go from NY to Houston in the first journey I use Air France and Delta in the second one.

The 10 most important SkyTeam benefits:1. More Miles: Earn Miles on the flights you make, exchange these with any of the other SkyTeam partners.

2. More lounges: Access to more than 400 member lounges worldwide.

3. Guaranteed reservations: Reservations made 24 hours before departure.

4. More flights: More than 16,000 flights to more than 840 destinations worldwide.

5. More fares: SkyTeam partners offer a ‘SkyTeam Around the World Fare’ for extensive travel around the globe.

6. Easy connections: Convenient connections to many more destinations worldwide.

7. Enhanced check-in procedures: Save time with streamlined check-in procedure.

8. Single check-in: Check in only once when connecting to flights with other partners.

9. Standardized level of quality: Same high level of quality on all participating airlines.

10. Extensive information and reservation network: Access more than 2,100 SkyTeam ticket offices worldwide, or visit the SkyTeam partners' websites.

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