Question

Many firms choose strategic alliance as a vehicle to achieve their strategic goal, yet it is extremely difficult to manage alliance. In the class, we have an example on recent alliance between Pfizer (a U.S. firm) and Biontech (a German firm) aiming at developing COVID 19 vaccine. Please think and answer the following questions:

1. What are the benefits and risks of this strategic alliance?
2. If you were CEO of Pfizer, how would you manage this strategic alliance?
3. How would Pfizer move forward after this strategic alliance (if they success, if they fail)?

$185 million upfront payment mRNA vaccine for COVID 19 Biontech Pfizer Leverage vaccine clinical R&D, manufacturing, and distribution

Answer 1

Benefits and risks of strategic alliance between Pfizer Company and Biontech company to develop COVID 19 vaccine

Benefits

Both companies can share the expertise and physical and monetary resources to develop COVID 19 vaccine. Intellectual capital of both companies can be better utilized to find a vaccine. Both companies can also beat competition relatively easily. It is also possible that both companies can build additional income opportunities and can gain a new market by developing COVID 19 vaccine.

Risks

Risks of this strategic alliance are elaborated. One risk is financial difficulty faced by companies to develop COVID 19 vaccine. Another risk is inefficiency in management that may result lack of synergy between both companies initiatives. Operational control loss can also be a risk for this strategy alliance that can take place. Some activities that are out of scope may be carried out by both companies. Hidden costs can also ruin chances to make a vaccine for COVID 19 pandemic.

Management of strategic alliance

As a CEO of Pfizer company, I should make alliance strategy by considering my company objectives. I should take into account organizational capabilities to ensure success of this strategic alliance. A formal process for alliance management should be established and assessment of Partner Company and my own company should be conducted. I should take into account ability of Biontech Company to achieve strategic aim of creating a vaccine for COVID 19 pandemic. I should consider mutual expectations and objectives for this strategic alliance to minimize misunderstanding. Consideration of profit motive will be taken into account and it will be ensured to gain mutual profits for both companies. A culture of sharing knowledge will be enhanced as well. To manage the strategic alliance, timing of terminating relationship will also be considered. These considerations can make management of this strategic alliance successful.

Moving forward with strategic alliance

If the company receives success, collaboration will be bolstered with Biontech Company and relationship with Biontech Company will be nurtured. A learning culture will be created and every employee of Pfizer and Biontech Company should be asked to make this strategic alliance successful.

If the organization does not receive success with strategic alliance, consideration of stakeholders affected by breaking the alliance will be considered. An upfront planning and involvement of all stakeholders and communication with them must be practiced for termination. The upfront planning can help both companies to amicably terminate the strategic alliance and minimize issues of stakeholders.