Strategic Alliances - Essay Example

Strategic Alliances In the current competitive business environment, sustainability and competitive advantage are the prime requirement of any organizations, operating in any segments. This is essential in order to increase the total sales and net income of the organization in the market among many other rival players. However, in order to do so, maximum extent of the organizations in this age is thriving for strategic alliances or mergers. Strategic alliance is considered as a sort of partnership with one of the greatest competitor of the brand (ESOMAR, 2008).

By doing so, the brand image and equity of both the organization might get enhanced thereby amplifying its profitability and market share among many other rival contenders. Similar, scenario is viewed in case of Maruti Udyog Ltd and Suzuki. In the year 1982, Maruti Udyog Ltd made a joint venture or strategic alliance with another reputed Japanese automobile manufacturer, Suzuki. Such an alliance took place mainly to enhance its equity and total sales in the market. As a result of which, the brand value and reputation of the brands might be enhanced as compared to other rival contenders.

The inner desires of both the brands became fulfilled by improving its equity by 26 percent to 40 percent in the year 1987 and to 60 percent by the year 1993. Not only this, the total sale of the brands also increased by almost 50 percent in the year 1992 as compared to previous years. This proved extremely effective for the brand thereby amplifying its brand image and distinctiveness in this aggressive market. In addition to this strategic alliance the organization sold almost 472, 000 unites of cars of varied designs and styles that improved the demand and popularity of the brand in the market among other rival brands.

Other than this, the brand Maruti Suzuki developed various new designs such as diesel engines by almost 5 million’s that also increased its exports by almost 50, 000 vehicles. This proved extremely effective for the organization of Maruti Suzuki that amplified its dominance in both domestic and international markets (Bradley, 2007). Furthermore, Maruti utilised the Japanese technology to develop numerous new designs that amplified its total sales by 764,842 in the year 2007- 2008. This enhanced its uniqueness and positioned itself as a market leader of automobile segment (Djordjevc & Miletic, 2012).

Due to which, the level of reliability and loyalty of the customers increased that improved its dependency as well. Thus, from the above mentioned points, it might be clearly stated that the strategic alliance of Maruti and Suzuki is a sort of partnership for advantage. This is because; with the help of such type of alliances, both the brands became successful in enhancing its total revenue and net income by US$ 5.9 billion and US$ 270 million by the year 2012. Hence, it might be clearly revealed that the strategic alliance takes place among two strongest competitors, operating in similar segment in order to improve the portfolio and competitive advantages in the market among other contenders.

In addition, with the help of such type of strategic alliance, the threat of new entrants such as Ford Motors, General Motors and many others. References Bradley, N. (2007). Marketing Research: Tools & Techniques. New York: McGraw-Hill. Djordjevc, B. & Miletic, S. (2012). Strategic alliances and joint ventures with foreign partners. Retrieved from: http://wudpeckerresearchjournals.org/RJBMA/pdf/2013/Febraury/Djordjevc%20and%20Miletic.pdf ESOMAR. (2008). Market Research Handbook. London: Sage.