Assignment 2- Strategic Alliance Announcement
According to the textbook a strategic alliance can be defined as, “ a partnership or arrangement between two or more companies with a common business objective.” In the case of HLS Systems International and Shenhua forming an alliance, I believe it will be successful based on the following criteria presented in class presentations, Cross-Border Alliances that Succeed. This outlines four major elements in having a successful alliance. The first element is “Alliances between strong and weak partner seldom work”. This will prove the alliance to be successful because both companies are strong and are leaders in their industries. The next element stated is, “Autonomy and flexibility are two key ingredients for successful partnership”. Neither of the two elements is directly commented on. However with little background it can be said that they are both Chinese companies therefore merging together may not be as difficult or unstable as it would be for two large companies from different countries. The third element stated is “Equal ownership means that partners are equally concerned about the other’s success”. Although HLS Systems International has 1,800 employees and Shenhua has 150,000 employees, HLS is an international company that posses a technology that “is able to effectively compete against the world's leading automation control companies,” making HLS very valuable to success in global markets. These companies are utilizing their complementary strengths in order to gain a successful alliance. HLS had the internationally competitive technology and Shenuhua has the manpower and resources to mass-produce products. This will expand both companies market potential and increase profits in a big way. This leads to the last element, “Alliances between partners that are related or have similar cultures, asset sizes, and venturing experiences tend to be much more viable”. Both HLS Systems International and Shenhua are Chinese...
Please join StudyMode to read the full document