Escolar Documentos
Profissional Documentos
Cultura Documentos
Before I continue, we thought it would be helpful to discuss what a strategic alliance is. Although "strategic alliance"
has become an increasingly popular term, it has no standard definition, perhaps because the concept is still developing.
For my purposes, today, I refer to a report by the Conference Board which gives the following three defining
characteristics.
Strategic alliances: 1) are strategic not tactical in intent; 2) focus on long-range goals and major economic benefits;
and 3) "feature tight linkages among partners, vested interests in the allies' future, support at the highest levels of
each organization, and emphasis on cooperation and collaboration" (Strategic Alliances, 1996, p. 6).
According to business dictionary, Agreement for cooperation among two or more independent firms to work together
toward common objectives. Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further
their aims but collaborate while remaining apart and distinct.
My intention is to evaluate the importance of Strategic Alliances in future, on the basis of how IBM used their
alliances in favor to gain their advantages.
From the above case, there are a few points that Ive found very interesting, in general, strategic alliance success
requires cooperative behavior from all partners. Actively solving problems, being trustworthy, and consistently
pursuing ways to combine partners resources and capabilities to create value are examples of cooperative behavior
known to contribute to alliance success.
Now in this case we are given to solve by our honorable teacher, Mrs. Kazi Noor-E-Jannat maam, ware in a bit of
darkness.
But let me show you a survey result on corporate alliances numbers and success to clear the clouds in our mind and
finally brag about the importance.
Many large and medium scale firms of different industries engage in strategic alliances. They make sole or multiple
alliances with domestic and international firms. Numbers of alliances made by some firms are shown below which
shows that IBM have the highest number of successful alliances through which IBM is generating large profits.
Page 1 | 3
Many firms, especially large global competitors, establish multiple strategic alliances. As described in the Opening
Case, IBM has formed alliances with Sun Microsystems, SAP, Lenovo, and Cisco, among others. The goal with each
cooperative relationship is different and very specific.
III.
IV.
V.
VI.
VII.
VIII.
IX.
X.
XI.
XII.
Powerful motive to create alliances is to decrease entry barriers by joining forces with other organizations.
An alliance helps to enter new international markets by overcoming political, economic and social barriers.
Home market competitive position is protected by alliances. Entering international markets may affect
domestic market but in international market, organization force foreign competitors at home divert their
resources away from expansion which protects the home market.
Alliances help in increasing distribution networks by acquiring new means of distribution.
Alliances decrease the manufacturing costs, other costs and risks of the project, product or services by
sharing between the alliance partners.
Alliances in business helps to gain access to intangible assets like brand name, expertise etc.
Due to alliances, potential rivals also cooperate which helps to decrease internal and external
uncertainties.
Strategic alliances help to broaden product line, services processes and fill product line gaps in the current
products. High cost and lack of technology may force a firm to seek a foreign partner to fill their product
lines.
Strategic alliances allow companies to enter new markets and to attract many potential customers which
expand their market share.
Strategic alliances reduce the risk of future competition by entering into an alliance with another
organization and it shows many future opportunities as well.
Alliances allow firms to gain efficiency by achieving economies of scales and vertical integration.
Resources are increased in strategic alliances. As the all partners of alliance provide resources. So the firms
that have less resources of any kind they create strategic alliances. Small firms often lack in research and
development resources for which they create alliances.
Strategic alliance is created to gain new skills and knowledge. Gaining knowledge is one of the most
important factors in creating alliances. Partners in an alliance learn from each others skills, expertise,
technology and technical standards.
Page 2 | 3
Page 3 | 3