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