Strategic alliance is defined as an agreement in which managers pool or share their organizations resources and know how with a foreign company, and the two organizations share the rewards and risk of starting a new venture. There’re many advantages of strategic alliances and network structures as recent innovations in organizational architecture. They can gain better access to attractive country market from host country’s government to import and market products locally. Secondly, they can take advantage of partner’s local market knowledge and working relationships with vital government officials in host country. It is very important to get working relationship with local government officials.Also they can capture an economies’ scale in production and/or marketing, when they operate together, they can use the same machine or equipment to produce products and use the same marketing channel for both products.This will help them save money and for value for their products. Another very impotant advantage is that they can learn from eachother not only policy wise but technology wise also. They can also share their facilities to knock down so many payments on distribution, helping to strike on their competiotion. This will also be making the competitors a smaller problem to a bigger, growing company.
7. Useful way to gain agreement on important technical standards, it is easier to set up a standard for the products with a joint effort.
8. Can reduce the cost and more efficient to penetrate the market by doing the followings: a. Joint research efforts
c. Joint use of production and distribution facilities
d. Marketing/promoting one another’s products.
Strategic alliances reflect an unstable economy. They are an attempt to offer stability to the environment. Factors of this turbulence are as noted: market globalization; technological innovations that break down barriers among sectors and...
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