international strategic alliances 13 i n t e

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international strategic alliances 13 - i n t e r n a t i

international strategic alliances 13 - i n t e r n a t i o n a l b u s i n e s s , 5 t h e d i t i o n chapter 13

Chapter Objectives 1 • Compare joint ventures and other forms of strategic alliances •

Chapter Objectives 1 • Compare joint ventures and other forms of strategic alliances • Characterize the benefits of strategic alliances • Describe the scope of strategic alliances 13 -2

Chapter Objectives 2 • Discuss the forms of management used for strategic alliances •

Chapter Objectives 2 • Discuss the forms of management used for strategic alliances • Identify the limitations of strategic alliances 13 -3

Strategic Alliances A strategic alliance is a business arrangement whereby two or more firms

Strategic Alliances A strategic alliance is a business arrangement whereby two or more firms choose to cooperate for their mutual benefit. 13 -4

Joint Venture A joint venture (JV) is a special type of strategic alliance in

Joint Venture A joint venture (JV) is a special type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents. 13 -5

Figure 13. 1 Benefits of Strategic Alliances Potential Benefits of Strategic Alliances Ease of

Figure 13. 1 Benefits of Strategic Alliances Potential Benefits of Strategic Alliances Ease of Market Entry 13 -6 Shared Risk Shared Synergy Knowledge and Competitive Expertise Advantage

Map 13. 1 Namibia and Joint Ventures 13 -7

Map 13. 1 Namibia and Joint Ventures 13 -7

Scope of Strategic Alliances • Significant variation – Comprehensive alliance – Narrowly defined alliance

Scope of Strategic Alliances • Significant variation – Comprehensive alliance – Narrowly defined alliance • Degree of collaboration depends upon basic goals of each partner 13 -8

Figure 13. 2 The Scope of Strategic Alliances 13 -9

Figure 13. 2 The Scope of Strategic Alliances 13 -9

Types of Functional Alliances Production alliances Marketing alliances Financial alliances R&D alliances 13 -10

Types of Functional Alliances Production alliances Marketing alliances Financial alliances R&D alliances 13 -10

Issues in the Implementation of Strategic Alliances Partner selection Form of ownership 13 -11

Issues in the Implementation of Strategic Alliances Partner selection Form of ownership 13 -11 Joint management

Factors Affecting Partner Selection 13 -12 Compatibility Nature of partner services Relative safeness Learning

Factors Affecting Partner Selection 13 -12 Compatibility Nature of partner services Relative safeness Learning potential

Approaches to Joint Management Shared management agreements Assigned arrangements Delegated arrangements 13 -13

Approaches to Joint Management Shared management agreements Assigned arrangements Delegated arrangements 13 -13

Figure 13. 3 a Shared Management Agreement Partner 1 Partner 2 Both parties are

Figure 13. 3 a Shared Management Agreement Partner 1 Partner 2 Both parties are active participants Alliance 13 -14

Figure 13. 3 b Assigned Arrangement Partner 1 Partner 2 One partner takes primary

Figure 13. 3 b Assigned Arrangement Partner 1 Partner 2 One partner takes primary responsibility Alliance 13 -15

Figure 13. 3 c Delegated Arrangement Partner 1 Partner 2 Joint venture 13 -16

Figure 13. 3 c Delegated Arrangement Partner 1 Partner 2 Joint venture 13 -16

Figure 13. 4 Pitfalls of Strategic Alliances Changing circumstances Incompatibility of partners Pitfalls Loss

Figure 13. 4 Pitfalls of Strategic Alliances Changing circumstances Incompatibility of partners Pitfalls Loss of autonomy Access to information Distribution of earnings 13 -17