chapter

13

International Strategic Alliances 13-1 Griffin & Pustay Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter Objectives

• Compare joint ventures and other forms of strategic alliances • Characterize the benefits of strategic alliances • Describe the scope of strategic alliances 13-2 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Chapter Objectives (continued)

• Discuss the forms of management used for strategic alliances • Identify the limitations of strategic alliances 13-3 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Strategic Alliances

A

strategic alliance

is a business arrangement whereby two or more firms choose to cooperate for their mutual benefit.

13-4 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

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 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 13.1 Benefits of Strategic Alliances

Potential Benefits of Strategic Alliances Ease of Market Entry Shared Risk Shared Knowledge and Expertise Synergy and Competitive Advantage 13-6 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Map 13.1 Namibia and Joint Ventures

13-7 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Scope of Strategic Alliances

• Significant variation – Comprehensive alliance – Narrowly defined alliance • Degree of collaboration depends upon basic goals of each partner 13-8 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 13.2 The Scope of Strategic Alliances

13-9 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Types of Functional Alliances

Production Alliances Marketing Alliances Financial Alliances Research & Development Alliances 13-10 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Issues in the Implementation of Strategic Alliances

Form of Ownership Partner Selection Joint Management 13-11 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Factors Affecting Partner Selection

Compatibility Relative Safeness Nature of Partner’s Products or Services Learning Potential 13-12 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Approaches to Joint Management

Shared Management Agreements Assigned Arrangements Delegated Arrangements 13-13 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 13.3a Shared Management Agreement

Partner 1 Both parties are active participants Alliance 13-14 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Partner 2

Figure 13.3b Assigned Arrangement

Partner 1 One partner takes primary responsibility Alliance 13-15 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall Partner 2

Figure 13.3c Delegated Arrangement

Partner 1 Partner 2 Joint venture 13-16 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

Figure 13.4 Pitfalls of Strategic Alliances

13-17 Copyright 2010 Pearson Education, Inc. publishing as Prentice Hall

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Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall