Group Members

Diana Katanskaya ID: 5280618

Manida Larprojpaiboon ID: 4880352

Mintra Watcharobon ID: 4980022

Renuka Siriyothin ID: 4980638

CHAPTER 1

OPPORTUNITIES AND IMPERATIVES

Content

IntroductionThe rationale for the alliancesDefining strategic alliances Ford Motor Company & Mazda MotorsStrategic Alliance Objectives

Introduction

Strategic Alliance as a diver of superior growth:ROI of 17 % during 10 yearsThe revenue increased more than doubleIn 2002 the amount of alliances exceed 35 %

It is time to move from “I own this” to “We must work together”

Strategic Alliances as a way to: To gain competitive advantage Enrich customer value Drive markets To fill critical capability gaps

Introduction

Strategic alliances are complex processBusiness FitImplementation Issues

New Key QuestionsWhen do we consider alliance as an option?

How long can we wait?

The US got high purchasing powerRussia had skill s and experience in aerospace industryThe alliance were planted in 1993The Tu-144 became Tu-144LL

The new of corporation alliance is

- the strategies

- the scope

- the distinction to other business relationships

The Rationale for Alliances

Many companies are not able to achieve their goals The competitions in the market are also intense The major forces that create the alliance

- The globalization of markets

- The search for capabilities as the rapid technology shift

- The scarcity of resources and intensifying competition of markets

The New Reality Macro-environmental forces:

Globalization Integration of markets

Rapid changes in technology: High costs R&D Short product lifecycle

The Rationale for Alliances

Increased global competition

Scarce resources

Shortening of the period of competitive advantage

Emergence of new regional trading blocs

The companies have to enhance their core competencies through new knowledge and capabilities

The Rationale for Alliances

The example of Oracle SystemShift from vertical integration to outsourcing and virtual

corporationAdopt new vocabulary

- Coopetition -> be able to learn to a partner and a competitor at the same time

- Complementarity -> None of the competitors have the same or the overlap business scope

The Rationale for Alliances

The Growth of CapabilitiesWhen the company faces strategic gaps in critical

differential capabilities that are too expensive or will take too long to develop internally, they ally with other companies in order to access to a subset of another’s capabilities.

In a strategic alliance, companies can select, build, and deploy the critical capabilities that will allow each of them to gain competitive advantages, enhance customer value, and drive markets.

Ex. Ford Motor Company and Mazda Motors

Defining Strategic Alliances

Transactional AlliancesLast less than 5 yearsPartners do not share critical capabilities and common strategyThe relationship does not involve control and is usually

contract driven

Forms of transactional alliancesCollaborative advertising or marketingShared distributionCross-licensing

Ex. - American Express and Toys-R-Us

- Nissan and Volkswagen

- Dreamworks and Universal Pictures

Defining Strategic Alliances

Strategic AllianceA commitment of at least 10 yearsA linkage based on equity or on shared capabilitiesA reciprocal relationshipAn increase in companies’ value in marketplaceA willingness to share and leverage core capabilities

Ex. - Cytel and Sumitomo Pharmaceuticals

- Toshiba, Siemens, and IBM

- Microsoft and NBC

Strategic Alliance Objectives

Risk sharing (unable to afford the risk)

ex. Kodak with three camera makersEconomies of scale ( have high fixed cost)

ex. British airways and American airlineMarket segment access (lack of customer -

understanding)

ex. Wal-mart and CifraTechnology acess (can not develop technology by

- yourself)

ex. IBM, Motorola, and Apple computer

Strategic Alliance Objectives

Geographic access (difficulty in penetrating a -foreign market)

ex. Anheuser-Bush and KirinHandling of funding constraints (large -development

cost)

ex. Lockheed and pentagon Skills leverage (access skill faster at lower cost)

ex. Glencore and MetaleuropValue-added barriers to competition (want to

strengthen skills and raise the level of competitive intensity)

ex.Washington post company and Russian publisher

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