Strategic alliance half

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Strategic alliance half

  1. 1. IS STRATEGIC ALLIANCE GOOD OR BAD FOR BUSINESS ???<br />
  2. 2. where their<br />Resources<br />Capabilities<br />Core <br />Competencies<br />are combined to pursue<br />mutual interests to<br />Develop<br />Goods<br />Manufacture<br />Distribute<br />Services<br />STRATEGIC ALLIANCE<br />Firm A<br />Partnerships between firms<br /> Firm B<br />
  3. 3. Joint Venture<br />An Independent firm is created by the joining assets from two other firms where each contributes 50% of the total. <br />EXAMPLE- VIACOM AND Television 18 private limited has a joint venture in India<br /> Equity Strategic Alliance<br />Partnership where the two partners do not own equal shares.<br />EXAMPLE- AIRCEL<br />Contract is given to supply, produce or distribute a firm’s goods or services (without equity sharing)<br />EXMPLE- FIAT MOTORS and TATA MOTORS in India<br />Types of Strategic Alliances<br />Non equity Strategic Alliance<br />
  4. 4. Gain access to a restricted market<br />Establish franchise in a new market<br />Slow Cycle Market<br />Maintain market stability<br />Reasons for Alliances by Market Type<br />
  5. 5. Gain market power<br />Gain access to complementary resources<br />Standard Cycle Market<br />Meet competitive challenge<br />Pool resources for large projects<br />Learn new business techniques<br />
  6. 6. Fast Cycle Market<br />Increase speed of product, service or market entry<br />Maintain market leadership<br />Form an industry technology standard<br />Share risky R&D expenses<br />Overcome uncertainty<br />
  7. 7. Benefits of Strategic Alliance<br /><ul><li>Gaining Capabilities
  8. 8. Easier access to target market
  9. 9. Sharing the financial risk
  10. 10. Achieving Synergy and Competitive advantage
  11. 11. Winning political obstacles</li></li></ul><li>Success Story<br />Maruti Udyog Limited<br />Joint venture with Suzuki of Japan.<br />
  12. 12. Success Stories<br />Joint venture of Marks & Spencer and Reliance Retail<br />
  13. 13. Failure of Strategic Alliance <br />Virgin Media and Tata teleservices Joint Venture ( Success to Failure )<br />
  14. 14. Failure of Strategic Alliance <br />Hotline Group (India) Joint Venture with Haier a Failure.<br />Failure of Strategic Alliance <br />
  15. 15. Failure of Strategic Alliance <br />JV between TVS Group (India) & Suzuki Motors (Japan) was called off in 2001.<br />
  16. 16. Disadvantages of Strategic Alliances<br />Less Profit.<br />Disputes.<br />Cultural Difficulties.<br />Lack of Co-ordination.<br />Lack of Trust.<br />Creating a Potential Competitor.<br />
  17. 17. Conclusion<br />Company sholud be careful before entering into an alliance.<br />Do not rely on the partner for the success.<br />Co-operate with each other.<br />

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