Strategic Alliances Two Company - Essay Example

Strategic Alliances two company Introduction For Sony, a sustainable market positioning and product development that will facilitate establishment ofa clear niche (Sony para 6) is the choice that strongly supports the alliance with Xerox. Improvement of our products does not only target our product mix but also takes care of technological level advancement that our strategic partner has. The prospect of eliminating unnecessary competition which will consequently create more opportunities for innovation has also been a target for Sony through the strategic alliance. Sony’s combined resources with Xerox will enable the two corporations to share the existing logistic plans as well as creating useful synergistic effort in expanding a current market (Gerybadze, 229). For Sony, our market penetration has been overstretched due to our limited capacity, but upon the implementation of the strategic plan, our choice will be maximising the availed opportunity and extend our market coverage to a higher level. Our existing market plan will be strengthened by incorporating the new products and technology that Xerox will provide. Alternatively, carrying out business together will enable the two corporations to perform joint business research as well as maximising on the capacity that each corporation was not capable of in seclusion. Sony’s choice for the alliance with regard to business operation will not be short of learning new business ideas and internalizing winning practices from our partner as well as the findings of the business research that we will jointly undertake. Basing our reasons of an alliance on the predetermined targets, it is expected that our corporation will aim to benefit in efficiency, effectiveness with regard to technological advancement and market penetration as explained at the end of this report. Objective Compatibility For the strategic alliance to function, there were many considerations that were made in order to ensure that the objectives of the corporations do not contradict and stand in the way of achieving the desired results. The main consideration was on the mission and visions held. For Xerox, the statement is; “Through the worlds leading technology and services in business process and document management, we’re at the heart of enterprises small to large, giving our clients the freedom to focus on what matters most: their real business,” (Xerox.com.)1 Comparison had to be made with Sony’s mission statement which is; “Sony is committed to developing a wide range of innovative products and multimedia services that challenge the way consumers access and enjoy digital entertainment. By ensuring synergy between businesses within the organisation, Sony is constantly striving to create exciting new worlds of entertainment that can be experienced on a variety of different products,” (sony-europe.com.)2 Apparently, there is a striking similarity in the corporations’ commitment to embrace technology and business processes that target the best options for the customers. It is therefore for the alliance to deliver magical results due to compatibility of their missions. The Strategic Alliance The form of alliance that Sony aims to engage Xerox is a joint venture for purposes of innovation cooperation as well as marketing. In the strategic alliance, the structure will be guided by the objective of the alliance which is inspired by two aspects; market and internal hierarchy designs. In light with the management structures of the two corporations as well as joint responsibilities, a shared management structure will be adopted by the alliance partners. Decision making will be shared among a number of top managers from each corporation, with preference to technology-innovation and marketing department specialization (Cullen, 86). Throughout the operation of the strategic alliance, the management will work to facilitate the achievement of specific objectives which will include; innovation cooperation, setting marketing strategy, improving business effectiveness and improving business efficiency. There will be objectives aiming at formulating and implementing strategic cooperation which will be put into effect in modular approach, first learning the strengths and weaknesses of each other. Management of the alliance as stated above will involve top managers from both corporations and performance monitoring will be done using a clearly outlined review program. Our strategic alliance will be carried out in a result based program on a five year basis, up to a maximum of four plans (twenty years). This implies that the engagement can continue or be terminated as provided in the five year plan strategy, which binds the parties at least until the end of each five year plan. This is outlined in advance for legal purposes where partners will be compelled to deliver results. The resources that are needed will include joint and separate resources such as human resource, laboratory facilities and finance depending on capacity as will be provided by our alliance experts. It is projected that our product quality, technology level of operation, marketing as well as operation practices will be our main areas of strengthening exploration through the strategic alliance with Xerox. Our expected benefits as targeted in the plan will be in; economies of scale, market expansion, capacity building, resource sharing, research and development (R&D), value learning, risk sharing, decreased costs as well as increased efficiency. Each of our concerned departments will aim at ensuring that the cooperation benefits are maximised (Gerybadze, 16). Alliance Analysis Sony will be better in an alliance than when it conducts business alone since its weaknesses in the past are likely to be eclipsed in the strategic alliance as targeted by the management (Madura, 120). Losses in revenues over the last five years will be shared while reducing sales volume will be improved by expanding market coverage. Management weaknesses will be improved by getting lessons from the best management team form Xerox coming in the project, while failed communication will be corrected in the presence of outsiders in the alliance. Market threats faced by Sony including competitors and imitation of its products will be tackled together. Xerox will be attracted to the alliance when the corporation’s weighs sharing options of strengths possessed by Sony; high technology level at Sony, a good brand name, experienced market presence, expansion capacity at Sony as well as competitiveness against Xerox rivals (Reuer, 360). Xerox will consider mitigation impact that Sony will bring to its weaknesses such as; losing competition battle, loss of revenue, expansion limitations, management inefficiencies, overstretched capacity as well as dwindling sales volumes. Works Cited Cullen, J., Multinational management: a strategic approach. Cincinnati, OH: South-Western College Publishing, 1999. Print. Gerybadze, A., Strategic alliances and process redesign: effective management and restructuring of cooperative projects and networks. Berlin, Germany: Walter de Gruyter, 1995. Print Madura, J. Introduction to business. Mason, OH: Cengage Learning, 2006. Print Reuer, J. Strategic alliances: theory and evidence. New York, NY: Oxford University Press, 2004. Print Sony (2011) About Sony. 2010.web. Viewed 18 January 2011. http://www.sony-europe.com/article/id/1178278971157 Read More