Question

Module 12: Discussion Forum

Read Jakada’s (2014) article, “Building Global Strategic Alliances and Coalitions for Foreign Investment Opportunities” on building global strategic alliances. What steps should the exporter take to ensure success when forming an alliance? What issues might arise when forming an alliance? What benefits might a global alliance bring?

NEED ORIGINAL ANSWERS

Answer 1

What steps should the exporter take to ensure success when forming an alliance?

An exporter should first of all select the proper partners for accomplishing the intended goals for eg alliance between Starbucks and PepsiCo created a popular brand Frappuccino where each partner met their strategic operational goal. The next step should be to share the right information. An alliance can be created with competitors by deciding how much of information to be shared with the partner Like an alliance between Stack bucks and Maxwell House brand benefitted both the parties as Starbuck product got the shelf space in the store and Maxwell got increase footfall of the customers. Next step is to negotiate a deal where proper risk and benefit analysis is done from all the sides. Next is to enter a realistic agreement which could change over the period of time for example alliance between HP and Disney where HP provide IT solutions to Disney with co-branding which formed a critical part of relationship. Last but not least step for an exporter is to enter into a mutual and flexible commitment on what will be appropriate to change, measure and share within the each partner’s culture.

What issues might arise when forming an alliance?

The various issues can be lack of control over the business you may perceived. There are no assurances that your business alliance will earn benefits to you. On forming business alliance you share the reputation of your business partner. Suppose the reputation of your business partner is not good in the market so your reputation will also be hampered. Also during the alliance process if something goes wrong with the business partner then you will also be held liable for that.

What benefits might a global alliance bring?

Global strategic alliances are getting popular world-wide because it helps both the parties to increase their brand awareness and capital. Another attractive benefit is to offer supplementary services to the clients. Alliances also help in getting new customer base, entering new markets without putting extra capital and time in setting up the business in new markets and countries.