Strategic Alliances
- 2. Strategic Alliances are co-operative agreements between two or more companies to work together and share resources to achieve a common business objective. CONCEPT
- 3. SPOTIFY AND UBER APPLE PAY AND MASTER CARD Apple decided to get into digital payment business, Apple got the services & Mastercard got it’s reputation GOOGLE AND LUXOTTICA With each other’s alliance, both companies expanded their business by combining technology with luxury These two companies, through this alliance, increasing their customer base as they offer uber riders to take control of the stereo
- 4. To Enhance Capability and Competence To Enhance Value Creation To Leverage Resources / Risk Management To Enhance Market Position and Achieve Business Development To Achieve Globalization OBJECTIVES
- 5. RESULTS IN ECONOMIES OF SCALE IF PROPERLY PLANNED AND EXECUTED WHERE RISK IS HIGH IN AN INDUSTRY, TWO- PLAYER FORM ALLIANCE TO MITIGATE THE RISK STRATEGIC ALLIANCE HELPS THE COMPANIES DEAL WITH COMPETITIVENESS BUILD BRAND AWARENESS BY USING GOODWILL OF AN ALREADY ESTABLIISHED COMPANY COMPETE WITH THE BEST PLAYER IN THE INDUSTRY RATIONALE OF STRATEGIC ALLIANCE
- 6. Select the proper partners for the indented goals Share the right information & come to a realistic agreement on time Negotiate a deal that includes both the risks and benefits Share details -Mutual, flexible commitment on what’s suitable to change Respect and protect the brand of each partner KEY FACTORS xzcz
- 7. THREAT 2 1 THREAT THREAT 3 THREAT 4 Partners may misrepresent what they bring to the table (lie about competencies that they do not have) Partner may fail to commit resources and capabilities to the other partners One partner may commit heavily to the alliance while the other partner does not Partners may fail to use their complementary resources effectively CHALLENGES
- 8. A joint venture is a child company of two parent companies. It’s maintained by sharing resources and equity with a binding agreement 1 Joint Venture An equity strategic alliance is created when one company purchases a certain equity percentage of the other company When two or more companies sign a contractual relationship to pool their resources and capabilities together Global strategic alliances are typically set up when a business desires to edge into a related business or new geographic market Global Strategic Alliances 4 Non-equity Strategic Alliance 3 Equity Strategic Alliance 2 Types of Strategic Alliances
- 9. JOINT VENTURE EQUITY STRATEGIC ALLIANCE NON-EQUITY STRATEGIC ALLIANCE GLOBAL STRATEGIC ALLIANCE Google & NASA together developed Google Earth Walmart invested in Indian E-commerce giant Flipkart Maruti-Suzuki alliance in India Nokia and Microsoft entered into Global Strategic Alliance Examples
- 10. 3 The firm has to be selective in choosing the partner looking at a bigger picture, so that everything runs smoothly, and business is not affected 2 Strategic alliances can work for the benefit of a business to reduce development costs and speed up timescales It is an important tool for attaining and maintaining competitive advantages 1 Businesses should be properly aware of the alliances and choose between the available options Mutual benefits among partners should be carefully assessed CONCLUSION
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