STRATEGIC ALLIANCEBY

D.GEETHANJALI

12MD022

CONTENTS

MEANING NEED STAGES OF STRATEGIC ALLIANCE FORMATION TYPES ADVANTAGES DISADVANTAGES CONCLUSION

STRATEGIC ALLIANCE

It is no longer an era in which a single company can dominate any technology or business by itself. The technology has become so advanced, and the markets so complex, that you simply can’t expect to be the best at the whole process any longer.

- Fumio Sato , CEO, Toshiba Electronics

MEANING

Strategic alliances are co-operative relationships between two or more independent organisations, designed to achieve mutually beneficial goals for as long as is economically viable

Co-operation lies between M&A.

Includes technology transfer, shared expenses and risk.

NEED FOR COMPANIES FOR STRATEGIC ALLIANCE

Reduce costs through economies of scale or increased knowledge

Increase access to new technology

Inhibit competitors

Enter new markets

Reduce cycle time

Improve research and development efforts

Improve quality

STAGES

Strategy Development

Partner Assessment

Contract Negotiation

Alliance Operation

Alliance Termination

TYPES

Joint Venture

Equity strategic alliance

Non-Equity strategic alliance

Global strategic alliance

CONT...

ADVANTAGES

Improve organization efficiency.

Offer to access new market and technologies.

Reduce the impact of risk.

Help to build independent brands.

Deals to heavy budget project.

FAILURE OF STRATEGIC ALLIANCE

DISADVANTAGES

Less Profit.

Co-ordination difficulties due to informal cooperation settings and highly costly dispute resolution.

High Influence costs because of the absence of a formal hierarchy and administration within the strategic alliance.

Culture difficulties

CONCLUSION