STRATEGIC ALLIANCES

STRATEGIC ALLIANCES

Strategic alliances are cooperative agreements between two or more companies to work together and share resources to achieve a common business objective.

WHY STRATEGIC ALLIANCE..?

• Sharing Resources like products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property.

• To create Synergy – to gain competitive advantage

TYPES OF STRATEGIC ALLIANCE

• Joint venture - Legally Independent Company• Equity strategic alliance - own different % of the company• Non-equity strategic alliance - A Contractual - Relationship• Global Strategic Alliances - working partnerships between

companies – across national boundaries or May be between foreign government.

OTHER TYPES

ADVANTAGES

• Allowing each partner to concentrate on activities that best match their capabilities.

• Learning from partners & developing competences that may be more widely exploited elsewhere.

• Adequate suitability of the resources & competencies of an organization for it to survive.

DISADVANTAGES

• Technology – Low Cost Manufacturing.– US & Japanese Companies

• Organization Culture.• Competition – How to Compete in future.

KEY FACTORS OF STRATEGIC ALLIANCE

Select the proper partners for the intended goals Share the right information Negotiate A deal that includes risk and benefit analysis (not necessarily equal) for all sides. Come to a realistic agreement on the time to market and corporate expectations Mutual, flexible commitment on what's appropriate to change, measure and share within each partner's culture

PROCESS OF STRATEGIC ALLIANCE

Setting alliance strategy

Selecting a partner

Structuring the alliance

Managing the alliance

Re-evaluating the alliance

STARBUCKS

• Barnes and Nobles bookstores in 1993 • In 1996 - Pepsico to bottle distribute and sell

the popular coffee-based drink Frappacino. • A Starbucks-United Airlines alliance has

resulted in their coffee being offered on flights with the Starbucks logo on the cups

• Kraft foods has resulted in Starbucks coffee being marketed in grocery stores.

APPLE LTD

• Apple has partnered with Sony, Motorola, Phillips, and AT&T in the past.

• Apple has also partnered more recently with Clearwell in order to jointly develop Clearwell's E-Discovery platform for the Apple iPad. E-Discovery is used by enterprises and legal entities to obtain documents and information in a "legally defensible" manner.

Thank You…