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The key factors influence the success of an international strategic alliance - Essay Example

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Executive Summary The success of an alliance Alliances generally depends on proper management with clearly set out objectives, that must be understood before the parties appends their signatures to the deals. Alliances have found a lot of relevance in the present global economy, and that is the reason why they are a wide range in addition they serve strategic objectives…
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The key factors influence the success of an international strategic alliance
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Download file to see previous pages Unlike other kinds of associations such as mergers and acquisitions, company hierarchy frequently times allows for evaluation after entering into such deals. More often, when strategic alliance performance does not constitute monetary gains but merely other benefits, this proves hard to quantify as success it is based upon intangible criterion rather than stable financial growth procedures. Alliance goals and objectives from case studies often fluctuate considerably from the originally penned down deals and as such more difficult to define. These shortcomings are merely challenges and if handled effectively they will result in the success of an alliance; however, the four key factors are primal to success of any alliance. Introduction Rakowski and Patz (2009, p.5) defines Strategic alliance as a cooperative arrangement between two or more companies to achieve a shared goals, so that each reimbursements from the powers of the other, and gains reasonable lead. Most literature identifies two categories of strategic alliances; those that are equity based and the non-equity based. Those that are based on equity include minority stock investments, joint ventures, to the furthest end majority investments. However, the non-equity based alliances are purely based on contractual agreements that spell out the relationships between the parties. In these arrangements the different parties to such agreements do not lose their independence and their autonomy with the regards to operations, however, the alliance do have an impact on their operations (Singh and Delios 2012, p.196). The emergence of strategic alliances has been seen as a reaction to globalization Vaidya (2006, p.256) insist that it is one of the most significant impacts of globalisation in the last 3 and a half decade coupled with the integration of markets and the increasing uncertainty and complexity in the business environment. Strategic alliances entail sharing of techniques and knowledge between parties involved plus schemes that involve the decrease of risks and expenses in areas such as relationships with suppliers and the development of new products and technologies. Strategic alliance has often been discussed within the realms of a joint venture, as it at times involves rivals, however more often it has a shorter lifespan than the former. Strategic partnership is a closely related concept, this paper explores the key factors influencing the success of international strategic alliances, through a two case study analysis. It is often stated that to understand the key reasons of the success, then it is imperative to grasp the rationale behind strategic alliances. The paper unearths that success depends on the levels of trust, communication, commitment and collaboration deciphering between the parties. For these factors above to flow seamlessly, the parties to the strategic alliance must have a fit with respect to alliance goals and objectives (Cullen and Parboteeah2013, p.315) its mechanics of operation and the performance evaluation criteria. Ogbor (2009, p.372) asserts that any company willing to enter into alliance with another party must look out for compatible goals; and complimentary capabilities. Globalization and Strategic Alliance With the proliferation of globalization and incorporation of markets into an international market, ...Download file to see next pagesRead More
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