Important Conditions For An Effective Vital Alliance And Methods To Identify A Potential Partner
My Thesis is centred around understanding how firms select partners for a strategic partnership, also effort is made to ascertain whether this selection process and criteria differ from those used by firms in the e commerce sector As the literature review revealed that life span and function of an alliance will be undermined if not meticulously scrutinized. In order to meet up with the goal and expectations of this research piece, two case studies were considered to ascertain and pinpoint the criteria leading successful strategic alliance and the criteria used in partner selection, furthermore, survey responses were analysed to ascertain the opinion of respondents on partner selection.
- The analysis of the first case study involving the failed alliance between
- Trust and Honesty
- Media Control
- Defining Type of Alliance
Renault and Volvo revealed meticulous and well processed planning is paramount in any strategic design, even though the alliance failed, the failure of this alliance went a long way in helping the researcher do justice to one of the core purposes of this research piece. In addition (for case study 2), the success of the numerous strategic alliance and network expansion of IBM (one of the best when in forming successful alliances) provided a concrete and resolute solution to the research questions. The following are the “dos and don’t” necessary for the selection of the right partner and for the successful operation of a strategic alliance; Common InterestWhile having an individual interest is plausible, it is imperative that all parties in an alliance have a common goal and be true to the cause, the lack of this attribute was a contributing factor to the demise of the Renault-Volvo Alliance.
For any strategic Alliance to be successful, it is sacrosanct that both parties are contributing significant quotas, and they have a genuine attribute or resource that is exclusively and genuinely theirs, in the case of the Renault-Volvo alliance, the low capital input of Volvo and their low market share made Renault consider acquiring Volvo since they are offering little in the alliance.
The analysis section revealed that the strong and reliable alliance can be aided by enabling an environment for the existence of a cordial social relationship amidst employees of partnering firms. This is achieved by sensitizing employees on the principles of love, equity, and justice and by identifying and finding solutions to the barriers that can sabotage the existence of this social relationship; some of these barriers may include language, culture and general perception of one another. Employees should be sensitized and availed enough time to adapt to the new change introduced to them to keep productivity and efficiency at the optimum.
This is one of the most sacrosanct criteria needed for a successful running of an alliance, any firm for an strategic partnership must select a trustworthy partner, a partner that would be true and honest to the documented agreement. Loss of trust and confidence leads to reduced productivity and the overall demise of an alliance if not proactively managed. The first case study revealed that the management of Volvo lost interest in the alliance when they received a report that Renault had a hidden agenda of acquiring Volvo.
When undergoing the phase of implementing a strategic alliance, participating firms must ensure they take close monitor on reports being published on the media, a single false or misinterpreted news may lead to lost of trust as seen in the first case study.
It is imperative that an alliance is classified as an exploitative or explorative, this will provide a clearer view of what the alliance should entail. The participating firm will have a clear view and understand the purpose of an alliance. Furthermore, some of the reasons why firms take part in the strategic alliance include; To get access to specific knowledge (Exploitative), to boost market sales through partner reputation, to get access to distribution channels. An international firm when trying to penetrate a local market often partner with local firms to get cultural knowledge and local regulatory knowledge, also, localized companies often seek an alliance with international firms when seeking gain international experience. Others include; to get access to production knowledge, to get access to production materials. The alliance is also easily formed when a firm has good past record on strategic alliance and has vast knowledge in providing solutions to labour related issues. Finally, the analysis revealed that the criteria needed for a successful alliance for e-commerce companies differ a little bit from the analysed data, e-commerce partners involved in alliances in e-sector always try to take the competitive advantage of each other, which often culminate into trust issues.
Strategic Alliances gives numerous chances to both the accomplices to share their abilities, aptitudes, and information among one another. It gives potential to an organization to have different asset capacities and have persistent favourable position over their rivals. This study has been able to show the criteria used in the selection of the right partner for an alliance and to conclusively provide the necessary ingredients needed for the implementation of a successful alliance. The effort was also made to conclusively highlight the major reasons why companies seek for partners and alliances. The was achieved through the use of qualitative research methods and survey data. Qualitative on two alliance case studies, with one being a success (IBM) and the other a failure (Renault-Volvo). And a survey was conducted to gather quantitative data which was analysed and presented in charts. The gathered qualitative data was analysed and arranged into themes and sub-themes, these themes and sub-themes served as a blueprint in providing solutions to the research problems. Defining the nature of an alliance, improving the relationship between employees by eliminating barriers, understanding common interest among many others is the key criteria in alliance formation. Finally, the research was able to show the criteria needed for a successful alliance for e-commerce companies differ significantly as alliance for e-commerce is often overlaid with taking competitive advantage of one another.
It is the hope of the researcher that the companies seeking to participate in the alliance will use the criteria identified in this research as a blue print when selecting a partner and when documenting the agreement of an alliance. Furthermore, it is advised that firms constantly review the findings in this research piece throughout their alliance period. In addition to the above, any firm seeking an alliance with an e-commerce firm must go into the alliance with mindset that these firms have a reputation of not playing by the rules and be willing to pay the sacrifice of being vigilant as these firms will attempt to take advantage of their partners.
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