Intercultural/ international management - Essay Example

What are the challenges in implementing global alliances in competitively sensitive areas? Global alliances are often used in competitively sensitive areas because it allows a foreign company to receive instant recognition in the local market. This can help reduce the risk of failure, but there still are some challenges of entering into global alliances in such market conditions. One of the most obvious challenges is that the local firm does not offer any advice and uses the foreign investment to grow its own business activities.

Once the foreign firm is felt to be no longer needed, then quite often the local firm will cut the other party out of the alliance and use the technologies gained from the alliance to pursue its own strategic goals. Inevitable conflict among global alliance partners can lead to the souring of the business relationship. Another challenge is that a foreign corporation has very little control over the sales and marketing strategies of the alliance because it has to rely on local knowledge which always comes from the business partner.

Finally, the last challenge of implementing global alliances in competitively sensitive areas is that the competitive advantage of a foreign firm can be lost. This is especially true in third-world countries where there is a lack of respect for copyright and patent laws. Once the technology is introduced to the local market, and other competing firms get to witness it firsthand, there is often nothing to some of them that prevents them from taking a product and applying small changes to it in an attempt to try and avoid violating international copyright law.