Discuss the concept of a strategic alliance, as well as its benefits and the components of a successful strategic alliance. Give examples.

Question

What will be an ideal response?

Answer 1

Answer: Student answers and examples will vary but should demonstrate an accurate knowledge of strategic alliances. Examples may include the TAG Heuer-Google-Intel collaboration; the partnership between Starbucks and Google; and the relative ease with which Asian, European, and American companies adapt to strategic alliances. A strategic alliance is a formal relationship created with the purpose of joint pursuit of mutual goals. Different organizations share administrative authority, form social links, and accept joint ownership. Alliances occur between companies and their competitors, governments, and universities. Partnering often crosses national and cultural boundaries. Companies form strategic alliances to develop new technologies, enter new markets, and reduce manufacturing costs. Alliances enable companies to move faster and more efficiently; they also can be the only practical way to bring together a wide variety of needed specialists. Components of a successful strategic alliance include a relationship (both partners work hard on developing a positive working relationship), metrics (the partners measure how they are going to succeed, not just the end result), differences (the partners embrace differences in one another), control (both partners encourage collaborative behavior with less emphasis on formal systems and structures), and management (the partners manage their internal stakeholders who are involved in the alliance).