Working Relationship between Southern Technologies and Acme - Assignment Example

Business to Business Marketing: Question 1: What are the other alternatives that Acme could look at that would create a working relationship between Southern Technologies and Acme? Acme could look at many other alternatives that will help in the better working relationship between Southern Technologies and Acne. One of them is joint venture. Joint venture is the independent partnership of different organizations and companies. Joint venture can even be within individuals, the only condition for joint venture is the formal agreement between the parties for joint venture to work in together for a particular project within a specified taxonomic group or particular region. It is a planned coalition among two or more entities to appoint in a particular plan or undertaking. Joint venture is almost like a partnership but a little difference is that partnership but they have significant differences in the implementations for the parties that are involved. Partnership refers to a long term relationship or collaboration between two parties but joint ventures are for a specified project or a business unit. Moreover, a joint venture has a particular term or life span, whereas a partnership is often for an undefined term. So getting into partnership at once is not known to be very helpful, as there is no idea that how the collaboration will actually work, so it is somewhat risky. The joint venture carries out a single or limited number of projects so reveal to the companies how there collaboration actually works. In a joint venture both the companies share a specific percentage of expenses and revenues as according to the percentage of investment they have made. It would be beneficial for Acme to do joint venture with Southern Technologies for any of the innovative projects. The Southern Technologies and Acne can jointly provide the best facilities for internet services and other wireless services if they both combine their best skills in a project. The joint venture is thought to be a very good option always. The benefit will go to both Southern Technologies and Acne for the joint venture, as they both are doing their best in their respective fields, and a combination of those can introduce them in the market with a new fame. The new developed project can not only enhance their business to business clients but can give them popularity among the public as well. As both the businesses have very strong skills and potentials and their growth rate is well, and the both have innovative ideas for their projects and are known for providing best products. Their joint venture can give them more resources for the projects, as well as greater capacity for dong a work, technical expertise will be increased, and they could enter into the other market, (that of the coalition partner) and hence greater access to new markets and distribution channels is made possible. There are a lot of good quality business and accounting motives for Acme to participate in a Joint Venture. Collaborating with a business that has harmonizing aptitudes as well as possessions, as instance distribution channels, finance, or technology, has always enjoyed a great importance in a business. And these are the factors that Acme can easily found in Southern Technologies. Even if the pundit’s claim come true in the coming 4, 5 years, the ventures done with a well reputed company would make the high profile of Acme, though Acme itself is a popular company and pioneer in its products, still if in four or five years, Acme happens to come across any crises, the joint venture done with the other company would be proven as helpful to it, as by entering into the other markets without any difficulty, and the projects. The company will not be novel in those projects and the markets, as it would have been introduced to other market through its joint venture with Southern Technologies. This joint venture could be done not only for the collective profits but for the development of innovative projects or intelligent property in order to access the target market and make its market value greater. This can also be done to increase the market shares that would be helpful in the years ahead. Smart business owners always believe that the fastest way to radically increase their business sales and to get the increasing profit, joint venture is the best option as it makes it possible with very less cost and risk but the point to be considered is that it should be done in the correct way. This will enable to generate synergy between both the organizations. Joint venture is a well known activity with lots of advantages for the company as it helps to maintain unindustrialized income and thus protect a quantity of particular income tax deferrals. This process includes procedure expertise, invention capability, delivery systems, as well as right of entry to raw materials. Above all, worldwide joint ventures symbolize for an ever more striking method to develop into overseas marketplaces whereas reducing supporting and financial risks like expropriation as well as money shocks intrinsic in international business activities. In the same way, The Acme could get better benefit off joint venture with Southern Technologies, as it would help it introducing to the market of aerospace and information technology., will enhance its business customers from the ISP’s and cable providers to a vast range of customers from technology of many kinds, will help him entering the market of raw material for a different project, that could be helpful in the future. The distribution channels for its services could be increased and the level of risk for the maintenance of the business could be minimized.  Joint ventures are also known as "working or operating arrangements”. It will help Acne to achieve both organization knowledge as well as possession in a business. However, the joint ventures could be dissolved quite simply than a partnership. Thus it could help in making up of an ideal structure and analyzing that partnership with South Technologies in future will be beneficial or not. Thus it could be said that it is a kind of trial partnership in order to understand whether or not to collaborate with Southern Technologies in long run. Question 2: What are the advantages and disadvantages of these alternatives? Joint venture is an innovative idea for Acme; it has many advantages, though there are many disadvantages, as well. Some of the advantages and disadvantages of joint venture between Acme and Southern Technologies are as follows. Advantages of forming a Joint Venture with Southern Technologies: it will Provide the Acme with the chance to get new capability as well as expertise the joint venture with Southern Technologies will allow Acme to go through related businesses and innovative geographic marketplaces as well as put on new industrial information right of entry to greater resources is made possible for Acme together with dedicated staff in addition to technology Another advantage that Acme can have is that its risk would be shared with Southern Technologies. Acme can have a flexible joint venture in order to gain the experience of working with Southern Technologies, as to fix a limited span on which Acme wants to work. Acme can exit from non-core business as joint venture, in the epoch of consolidation and divestiture, proposes a inventive way for companies Another main advantage for Acme is that, if ever the claim of pundit’s come true, in the coming three four years, with the help of its joint venture with Southern technologies, Acme can gradually separate its business from the rest. Acme, if in actually its rate of sales levels off, by the means of its joint venture with Southern Technologies, can eventually sell its business to them. In the joint venture with Southern Technologies, Acme will individually own its assets. And these assets can be rolled over on the basis of a tax-deffered transfer. In the joint venture with Southern Technologies, acme only had to share its capital assets, which may allow lowering the production costs and allows a fixed cost to be smear on large base. Acme can gain more specialization and for the individuals it will be more off time than was in the sole proprietorship farms, in the joint venture with Southern Technologies as it allows the sharing of management and labor. If Acme found it uneasy with the coalition, the venture could be stopped as dissolving of a joint venture is easier than that of a partnership. Also, joint ventures permits to change the share ratios within the years. With joint venture with Southern Technologies, the cost for establishment would be lowered. Another advantage is that the younger generation involved in these information technology projects will be allowed to develop management experience. By the joint venture of Acme and Southern Technologies, both the companies can save their money and reduce the ratio of risk as they will be sharing their resource and capital. Both companies will be allowed to develop even larger projects and enter larger market places. By the joint venture of Acme and Southern Technologies, both the companies can gain access to wider markets, as if previously they had access to one market type, now it will be doubled, and it assures the increase in the sale, too. Research and development can enhance the technological capabilities. Disadvantages of forming a Joint Venture with Southern Technologies: Developing a joint venture with Southern Technologies sound to be advantageous for Acme, but still like all other processes joint venture too has some drawbacks. There are some chances for the disadvantages of joint venture for the Acme. These can be explained as follows: Doing partnership with any other business is not a very easy task; a lot of points are to be considered. Moreover, it takes a long time in building up a right collaboration with any other organization. The company has to put a lot of effort in order to make up the relationship with other partner. It is quite ca challenging job. Same is the case with Acme, to develop partnership with Southern Technologies it has to put forth a lot of efforts and much of the time should be given to collaboration, in order to make it work the better way. There is chance for problems to occur if: If the Acme and southern Technologies, fail to clearly document the objectives of their venture, it could create problems and hurdles for both of the companies, in future. If both the companies have an imbalance of expertise, these do not goes into the advantages to any f them If the assets and investments that Acme, and Southern Technologies are bringing into the venture are uneven or imbalance, it becomes a negative aspect of the joint venture between them and can cause difficulties for both the parties to collaborate further. Poor co-operation and integration could be resulted if the cultures and management styles of Acme and Southern Technologies are different. Only the thorough research and analysis of objectives of both Acme and Southern Technologies could result in the success of joint venture other wise it is a clear failure. Good communication are needed to be practiced by both Acme and Southern Technologies, as it is often seen that in almost every type of business arrangement there is a chance of disagreement between the companies, at any stage. And no doubt, it is often because of the lack of communication or understanding of the other’s objective. Hence to reduce this drawback, both the companies need to b better in communication and explaining their objectives and view points. As in a sole proprietorship, the Acme and Southern Technologies will not be independent in the decision making and action. If the project fails or there is a disagreement between the partners it results in the potential financial loss. Question 3: What are the objectives that Acme would like to accomplish out of such partnership? Before committing to a joint venture or a partnership, it is worth important to have a review of the business strategy of your own. it helps in defining the objective that what one can expect from the accomplishment of such joint ventures or partnership. It is important to be aware of what other businesses are doing specially those running in the similar markets. And the strengths and weaknesses of the business should be well known. All this is very important in order to define the objectives and aims of your project and what one expects from the partnership. No doubt, partnership is a successful scheme of business to get more benefits from fewer resources. But it is only successful if the clear objectives are known so that the strategies are made that way. Acme, while doing partnership with Southern Technologies, will consider many of the objectives for its businesses. Acme, is originally working in wireless broadband technologies, and Southern Technologies provide advance technology in aerospace and information technology, worldwide. This is quite similar to the business of Acme. Acme by taking the new technologies of Southern Technologies and merging them with its own can develop much better projects. Or its wireless broad band technologies could be used in the mechanism of aerospace and many fields in information technology. Thus it is very economical for Acme to work in collaboration with Southern Technologies. At the accomplishment of such a project, Acme would definitely enter into even a higher market, if previously Acme was working for the Cable providers and ISP’s, now its target customers would be increased with the aerospace technicians and other information Technology companies that used wireless broad bands for their networks and others. Though, in a sole proprietorship, it is very hard for Acme to enter a new market, because it needs a lot of effort and resources, in addition it costs much. But with a partnership with Southern Technologies, it will become very easy with less resources and costs. Also, Acme, need to build credibility in a specific target market with this partnership. It would be very helpful for Acne, in the future, especially if according to Pundit’s claim its business sales come to en end. By this partnership, it would be helpful for Acne to enhance its business, may be into other Business Segments units. Moreover, if ever needed in future, this business segment of Acme could be gradually dissolved into the other without incurring a greater loss. Acme needs to use as more recourses as possible with very low cost, especially the expertise of other technologies, and this could not be done without a partnership with any other organization. So by the end of this partnership Acne, will not only be recognized in the new market but will also be able to access the more target customers. The new market strategies will not be strange for Acme; this would help it to survive there, as well. The skills and expertise of these new fields and projects will be learnt during the partnership development, thus it will be easy to work in such projects, furthermore. Question 4: What Counter proposal(s) would you recommend? The counter proposals that I would recommend to Acne for its partnership with the Southern Technologies are: Allocation of Income and Profits Before committing to the partnership, both the parties, Acme and Southern Technologies, should determine how the income would be divided among them. It should be based on the percentage of the investment of each party. And by every year, a new calculation should take place according to the investment by each party. All the expenses, costs revenues and other assets that are to be shared should be determined before going ahead. The division of income will also depend on the resources used of any party and the other assets and expertise of any business party. The approach of contribution: It is again the division of income according to the contribution of each part in the business. Acme and Southern Technologies should consider the assets put forth by the other party and the final income and profit should be given according to this regard. As business parties can contribute by their capitals, management labor, expertise and underlying principles that are to be shared with the same ratio as costs and other expenses are shared. Value of Contributions Realistic estimates of values should be kept in mind when calculating the contribution of every business company. In order to value the assets, the market values of those assets should be used. Same is the case with the labor and management values, they should be according to cost that could be incurred if these were hired through the farms or the value that could be earned from else where. Investment interests should be according to the long term interest rates. However, these share ratios should be revised whenever there is a change in the market value of the contributions put forward by the business parties. Accounting Accounting is the central part of every business. For the partnership, every business should not carry out its own accounting or the others accounting but there should be a separate system that will be responsible for handling all the transactions of both the companies from a joint account of both. Though, every business should have its own accounting system for the individual transactions, and that should not be interpreted with the joint accounting system. Read More