Course Title: International Business Analysis

Student Name: SAIMA SIRAJ

Student Registration/roll No: 1807191
Class/Session: BBA VI (C) EVENING
Semester: VI
Date of submission: 20- jan-2021
Assignment No: 2
Faculty Name: M. Faseeh Khan
 Assignment No.2
Course Title: International Business Analysis Faculty Name: M.Faseeh khan

Class Session: BBA-VI-C Marks: 10

Q1 Summarize the strategies, structures, and alliances available to the

international business

Answer: Business Strategies

A major concern for managers deciding on a global business strategy is the
tradeoff between global integration and local responsiveness. Global
integration is the degree to which the company is able to use the same products
and methods in other countries. Local responsiveness is the degree to which the
company must customize their products and methods to meet conditions in other
countries. The two dimensions result in four basic global business strategies:
export, standardization, multi-domestic, and transnational. These are shown in
the figure below.
International business strategies must balance local responsiveness and global
integration.

1. Export Strategy
An export strategy is used when a company is primarily focused on its domestic
operations. It does not intend to expand globally but does export some products
to take advantage of international opportunities. It does not attempt to customize
its products for international markets. It is not interested in either responding to
unique conditions in other countries or in creating an integrated global strategy.

2. Standardization Strategy
A standardization strategy is used when a company treats the whole world as one
market with little meaningful variation. The assumption is that one product can
meet the needs of people everywhere. Many business-to-business companies can
use a standardization strategy. Machines tools and equipment or information
technologies are universal and need little customization for local conditions.
Apple uses a standardization strategy because its products do not have to be
customized for local users. An iPod will look the same wherever you buy it. A
standardization strategy produces efficiencies by centralizing many common
activities, such as product design, gaining scale economies in manufacturing,
simplifying the supply chain, and reducing marketing costs.

3. Multi-domestic Strategy
A multi-domestic strategy customizes products or processes to the specific
conditions in each country. In the opening example, Lincoln Electric should have
used a multi-domestic strategy to customize its manufacturing methods to the
conditions in each country where it built factories. Retailers often use multi-
domestic strategies because they must meet local customer tastes. 7-Eleven is an
example of a company using a multi-domestic strategy. It tailors the product
selection, payment methods, and marketing to the values and regulations in each
country where it operates. For example, in Japan, 7-Eleven allows customers to
pay their utility bills at the store. In a company with a multi-domestic strategy,
overall management is centralized in the home country but country managers are
given latitude to make adaptations. Companies sacrifice scale efficiencies for
responsiveness to local conditions. Companies benefit from a multi-domestic
strategy because country managers understand local laws, customs, and tastes
and can decide how to best meet them.

4. Transnational Strategy
A transnational strategy combines a standardization strategy and a multi-
domestic strategy. It is used when a company faces significant cost pressure from
international competitors but must also offer products that meet local customer
needs. A transnational strategy is very difficult to maintain because the company
needs to achieve economies of scale through standardization but also be flexible
to respond to local conditions. Ford Motor Company is adopting a transnational
strategy. Ford is producing a “world car” that has many common platform
elements that accommodate a range of add-ons. That way Ford benefits from the
standardization of costly elements that the consumer does not see but can add
custom elements to meet country laws, can customize marketing to local
standards, and can provide unique products to meet local tastes.

STRUCTURES:
An organizational structure is followed by all the international business
organizations. The main responsibility of following an organizational structure is
to set right all the processes of the organization. There are different types of
organizational structures and the type of organizational structure adopted by the
business depends on the business requirements and operations.

1. Initial Division Structures

Some of the business which is into on-site manufacturing, the firms involved in
export usually adopts this Initial Division Structure. Some of the illustrations are
the consulting and financial firms usually follow Initial Division Structure. Some of
the export firms that adopt this type of organization structure include the firms
with technological advanced products.
2. International Division Structure
In order to take care of the international operations of the business, a specific
international division structure is being built. All the business which are still
developing for setting up the business operations internationally, this structure is
being adopted.

Advantages

The top management is exposed to the knowledge about the attitude of the
foreign market.

The international operations are performed united.

Disadvantages

It requires separate managers locally for managing the international counterparts.

Global allocation of resources turns out to be very difficult.

3. Global Product Division
In accordance with the groups of the product, the structure is divided such that
the specific product groups are taken care by the divisions. Each of the division is
considered as a profit center.

Advantages

Product, technology and customer diversity is managed

All the local needs are catered

This model facilitates in coordination of all the different departments such as

marketing, production and finance.

Disadvantages

There is a possibility of existence of duplication of the staff.

Usually the managers get deviated from concentrating on the long-term goals.

Only the local market is concentrated by the division managers.

4. Global Area Division
When the operations of a business are controlled on the basis of geographical
location rather than the type of product, it is known as Global Area Division. Many
companies that are usually in the business which has only selected products
adopt this global area division.

Advantages

The operations at domestic and international level remain to be the same.

The operations of the specific geographical area are being managed by the global
managers

The unit cost can be reduced.

Disadvantages

According to the geographic locations, it is very difficult to align the product

No efforts are being out on R&D.

5. Global Functional Division
On the basis of different functions, the global operations are organized by this
global functional division.

Advantages

More emphasis is given to functional leadership, leaner managerial staff and

centralized control.

The businesses that require control on the integrated production mechanisms

adopt this practice of Global Functional Division.

This model is best suitable for the business which involve in transportation of
goods and raw materials.

Disadvantages

This model is not suitable for all business types. This model best suits only to oil
and mining firms.

The coordination of the different processes becomes difficult.

Since the different processes are not integrated, management of all the processes
turns out to be difficult.
6. Mixed Matrix
Mixed Matrix is a combination of global product, area, and functional structures.

Advantages

All the individual needs of the business are met.

In accordance with the local needs ad priorities, the approach is tailored-made.

Disadvantages

The structure is very complex and it is a combination of one or more models.

The structure involves too many independent groups.

ALLIANCES FOR International Business:
Strategic alliances are agreements between two or more independent companies
to cooperate in the manufacturing, development, or sale of products and services,
or other business objectives.

For example, in a strategic alliance, Company A and Company B combine their

respective resources, capabilities, and core competencies to generate mutual
interests in designing, manufacturing, or distributing goods or services.

 Types of Strategic Alliances

There are three types of strategic alliances: Joint Venture, Equity Strategic
Alliance, and Non-equity Strategic Alliance.

#1 Joint Venture
A joint venture is established when the parent companies establish a new child
company. For example, Company A and Company B (parent companies) can form
a joint venture by creating Company C (child company).

In addition, if Company A and Company B each own 50% of the child company, it
is defined as a 50-50 Joint Venture. If Company A owns 70% and Company B owns
30%, the joint venture is classified as a Majority-owned Venture.

#2 Equity Strategic Alliance

An equity strategic alliance is created when one company purchases a certain
equity percentage of the other company. If Company A purchases 40% of the
equity in Company B, an equity strategic alliance would be formed 

#3 Non-equity Strategic Alliance

A non-equity strategic alliance is created when two or more companies sign a
contractual relationship to pool their resources and capabilities together.
Q2 What are some of the issues and problems associated with finding
and selecting successful alliance in IB?

Answer: ISSUES AND PROBLEMS FOR SUCCESSFUL

ALLIANCE IN IB:
1. Choosing the Right Partner 
The challenges to a strategic alliance begin during the very first stage of choosing
a partner. Choosing the wrong partner can be damaging if it is not able to
contribute to the growth of your business and offer a degree of dedication,
honesty and integrity to the partnership. When researching different businesses
that your company could potentially form an alliance with, it is important to keep
in mind that this will often be an exclusive relationship, meaning it may very well
be the only business your brand will be able to partner with in the category. In
partnerships, the franchise company is going to want to choose businesses with a
positive reputation in its industry that uphold similar policies and values as within
its business model. Once a relationship is formed with a business in a specific
industry, the odds of forming more in that same industry are very slim, so it is
important to do it right the first time.    

2. Building a Mutually Beneficial Alliance 

Organization’s believes that one of the biggest challenges of entering a strategic
alliance is ensuring that the partnership is going to benefit both businesses
involved. With human nature being motivated by self-interest, it is often difficult
to enter into a business relationship with the goal to benefit the other   party just
as much as it will benefit your brand. Once that emotion is overcome, a new
challenge arises to continue to keep the relationship mutually beneficial
throughout its lifetime, which will require dedication, trust and honesty. 
3. Upholding Trust and Honesty 
Without a certain degree of trust and honesty, a partnership has no foundation to
build on. It is important for both parties approaching an alliance to set their
expectations clearly and concisely before the partnership is solidified.    

For example, 1-800-GOT-JUNK may eventually find it necessary to change its

insurance coverage for its truck teams which would definitely affect the job being
done with the partnering company. If this what-if isn’t discussed in the beginning
stages of solidifying the partnership, it could potentially affect the agreement and
foundation built with your partner.    

4. Knowing When to Reassess the Alliance 

Every business will experience constant flux and change and initiatives that have
once been prosperous may not be right two to three years down the road. To
ensure that a business alliance continues to mutually benefit both parties, it is
important to know when to reassess the alliance and change the foundation. Both
businesses must understand that change is inevitable and must be able to work
together to reach new agreements over time. Sometimes the need to restructure
will be clear, while at other times it will take the initiative of one or both sides of
the partnership to actively seek whether or   not the partnership is still working. It
is a good idea to reassess a business alliance at regular intervals. 

Strategic business alliances could be the next step in the growth and marketing
initiatives for your franchise as they offer a wealth of benefits including increased
brand awareness and the ability to reach new markets and offer supplementary
services to your clients, but there is a certain level of risk involved and
partnerships should be approached carefully. 

Business alliances should be approached just as one would approach a friendship.

Both need constant nurturing to grow and prosper. There must be consistent and
quality interaction as well as thorough, clear communication to obtain the best
results. If a friendship or alliance is not constantly being nurtured, “fall out” might
result. 
In the end, strategic alliances offer tremendous potential benefits to both parties.
But like any relationship, both companies need to carefully assess each other’s
motivations and expectations before making a commitment. It’s necessary for
both companies to bring equal value to the partnership. Franchisors should go
into partnerships unselfishly and with clear expectations from both sides–just as
they would before signing on a franchisee. 

Q3 How are these activities and requirements different or the same

when moving to the international market?

Answer: ACITIVITIES AND REQUIREMENTS TO

INTERNATIONAL MARKET:
Going global” is defined as the worldwide movement toward economic, financial,
trade, and communications integration. The concept of globalization can be
traced back as far as the Roman Empire. More recently, the concept was
popularized by Thomas L. Friedman in his book The World Is Flat, in which he
argued that the pace of globalized trade, outsourcing, and supply-chaining was
speeding up and that its impact on business organizations and business practices
would continue to grow in the 21st century.

For small and emerging businesses, going global is a significant undertaking that
could disrupt existing business activities. Thus, it is for crucial for CEOs and
business leaders to understand its full impact and determine if the rewards
outweigh the risks. Stakeholders across the organization will be called on to carry
more responsibilities to continue to execute on day-to-day activities in addition to
the global initiative.

Taking a small business global is an complex and dynamic process. Gaining a deep
understanding of the targeted markets, the competition, current local market
trends, and the requirements to successfully launch and drive growth lays an
important foundation.
1. Develop a game plan.
Formulating a strategy for going global requires the same kind of planning and
market analysis needed for success in domestic markets. There are also some
nuances that factor into the equation, such as logistics, customs duties and
currency conversion. But the good news is that there are a number of free or
inexpensive resources available to help you get started.

2. Identify the product or service you have to sell.

It may seem self-evident, but you need to have a viable product or service, and
know there is a market for whatever it is you hope to export. In general, many
American exporters already have developed a domestic market for their products
or services before venturing overseas.

3. Develop an export plan.

A free government resource to help you prepare an export plan is the Basic Guide
to Exporting. The guide includes an outline of 11 questions that potential
exporters may want to ask as part of the export plan development process. By
answering these key questions, you may gain a better understanding of
everything from product and licensing requirements to logistics and pricing
strategies.

4. Conduct market analysis.

As the Basic Guide to Exporting notes, some companies rely on secondary data
sources because they are more readily available—and less expensive—than
conducting primary market research. Whether you conduct your own research or
rely on secondary data sources, conducting market analysis can help you to
determine what the top countries are for products similar to yours. Other
research should focus on your price competitiveness, potential distribution
channels, and duties, taxes or regulations that may constrain entry into a
particular market.
5. Segment potential export markets.
Another key component in assessing export opportunities is to estimate the
potential size of your market in the countries you have targeted. Market
segmentation can provide insight about how many potential customers you have
in a given country and, more importantly, how to reach them. One resource to
consult when developing an export marketing plan is Exporting: The Definitive
Guide to Selling Abroad Profitably by Laurel Delaney, founder of international
consulting agency Globe Trade.

6. Assess your competition.

Whether you sell in the United States or in some other global market, you need to
understand who your competitors are. Every export market will have a unique set
of competitors and understanding the competitive landscape is important before
trying to sell in another country. In fact, a detailed competitive analysis should be
conducted for every potential new export market you are considering. One tool
for assessing the competition is the book Import/Export Kit for Dummies by John
Capela.

7. Determine if there are packaging , labeling or regulatory

requirements.
Labeling, for example, may need to be customized for a particular market, and the
term "Made in the USA" may not be acceptable on the packaging. One best
practice is to plan on labeling products in the language of the country you are
selling to. It is also important to determine if there are special labeling
requirements, as is often the case with food and pharmaceuticals exports.
8. Use trade shows to test markets for your product or
service.
In addition to traditional market research, one way to test the potential for your
products overseas is to participate in industry trade fairs in the markets you are
considering. One starting point for identifying potential trade shows is the Trade
Show News Network website.

9. Test your strategy in a single market with low barriers to

entry.
U.S. companies often start expanding internationally by exporting to Canada.
Geographic proximity, along with cultural and language similarities, help make
Canada a good proving ground for American companies venturing across the
border for the first time. Regardless of which market you plan to enter first, set
realistic goals and take baby steps first.

10. Leverage free and low-cost resources from government

agencies.
The Small Business Development Center (SBDC) network is one starting point for
new-to-export companies. Many states also provide free counseling for
companies interested in exporting. A list of those resources can be found on the
State International Development Organizations website.
Q4. Discuss two strategic alliances available to IB with advantages and
disadvantages of each.

Answer: Strategic alliances can take many different forms, but they often fall
into three categories:

Joint Venture, Equity Strategic Alliance, and Non-equity Strategic Alliance.

Joint Venture
A joint venture is a child company of two parent companies. It’s maintained by
sharing resources and equity with a binding agreement. Whether it’s formed for a
specific purpose or an ongoing strategy, a joint venture has a clear objective, and
profits are split between the two companies.

In 2016, Google’s parent company Alphabet announced a joint venture with

GlaxoSmithKline to research treating diseases with electrical signals. The joint
venture, Galvani Bioelectronics, has continued to grow, bringing on more partners
to build devices and further research in the emerging field of bioelectronics.

Advantages of joint ventures

1. Joint ventures enable companies to share technology and complementary IP

assets for the production and delivery of innovative goods and services.

2. For the smaller organization with insufficient finance and/or specialist

management skills, the joint venture can prove an effective method of obtaining
the necessary resources to enter a new market. This can be especially true in
attractive markets, where local contacts, access to distribution, and political
requirements may make a joint venture the preferred or even legally required
solution.

3. Joint ventures can be used to reduce political friction and improve

local/national acceptability of the company.
4. Joint ventures may provide specialist knowledge of local markets, entry to
required channels of distribution, and access to supplies of raw materials,
government contracts and local production facilities.

5. In a growing number of countries, joint ventures with host governments have

become increasingly important. These may be formed directly with State-owned
enterprises or directed toward national champions.

6. There has been growth in the creation of temporary consortium companies and
alliances, to undertake particular projects that are considered to be too large for
individual companies to handle alone (e.g. major defence initiatives, civil
engineering projects, new global technological ventures).

7. Exchange controls may prevent a company from exporting capital and thus
make the funding of new overseas subsidiaries difficult. The supply of know-how
may therefore be used to enable a company to obtain an equity stake in a joint
venture, where the local partner may have access to the required funds.

Disadvantages of joint ventures

1. A major problem is that joint ventures are very difficult to integrate into a
global strategy that involves substantial cross-border trading. In such
circumstances, there are almost inevitably problems concerning inward and
outward transfer pricing and the sourcing of exports, in particular, in favour of
wholly owned subsidiaries in other countries.

2. The trend toward an integrated system of global cash management, via a

central treasury, may lead to conflict between partners when the corporate
headquarters endeavours to impose limits or even guidelines on cash and
working capital usage, foreign exchange management, and the amount and
means of paying remittable profits.

3. Another serious problem occurs when the objectives of the partners are, or
become, incompatible. For example, the multinational enterprise may have a very
different attitude to risk than its local partner, and may be prepared to accept
short-term losses in order to build market share, to take on higher levels of debt,
or to spend more on advertising. Similarly, the objectives of the participants may
well change over time, especially when wholly owned subsidiary alternatives may
occur for the multinational enterprise with access to the joint venture market.

4. Problems occur with regard to management structures and staffing of joint

ventures.

5.Many joint ventures fail because of a conflict in tax interests between the
partners.

Non – Equity Strategic Alliance

In a non-equity strategic alliance, organizations create an agreement to share
resources without creating a separate entity or sharing equity. Non-equity
alliances are often more loose and informal than a partnership involving equity.
These make up the vast majority of business alliances.

Taking equity-sharing out of the equation can be a strategic advantage in research

and development, production, and sales and marketing. In the previously
mentioned example of Galvani Bioelectronics, there are many non-equity
strategic alliances that have grown out of the original joint venture
through Project Baseline. This is a connected ecosystem of organizations all
working together to create “a more comprehensive, precise map of human
health.”

Advantages of Non-Equity Strategic Alliance

Firm Career Pathing and Promotability:

Firms can promote bright up-and-comers when their top-line revenue is not yet
significant enough to sustain their admission as equity partners. Firms can
promote managers to income, or non-equity, partners without being committed
to progress them further. This is a tactic we call “parking.” The firm and the
income partner can “test drive” their partner relationship before the income
partner is admitted as an equity partner. This makes the promotion easier to
“undo.”
Recruiting:

Firms can test-drive a partner-level candidate as a “direct admit” without having

to commit to equity status initially. Some firms believe that having a non-equity
partner level gives them an “easy in” and an “easy out” if things don’t work out
with a strong recruit.

Retention:

Firms may retain key people who do not qualify for equity partnership by
acknowledging their value or contributions with a promotion to the partner level,
albeit in a non-equity position

Marketing:

Being able to promote someone to partner provides increased credibility for that
person within the community—and the firm.  Having a non-equity partner level
makes that promotion feel easier for firms.

Governance:

Firms can use the non-equity partner level to add new, often-younger voices to
the organization’s decision-making processes.

Compensation:

Income partners often have a guaranteed base salary, providing them with less
earnings risk than equity partners have. Because most compensation programs
offer non-equity partners a share of net income, their focus on profit
performance is heightened. Most firms do not dramatically accelerate the income
partners’ overall earnings when promoted, so this promotion is usually not costly.

Buy/sell:

Firms that consistently use a two-step process to admit equity partners can use
the non-equity step to prepare potential equity partners for their buy-in, reveal
the equity shareholder agreement to them, and share other details firm
leadership might not feel are appropriate to share with all managers. We
advocate that you share those details with all managers.  

Disadvantages of Non-Equity Strategic Alliance

Firm Career Pathing and Promotability:

Confusion can arise in the firm as to whether one has to be a non-equity partner
before becoming an equity partner.

Most firms do not create enough of a distinction between income and equity
partners in terms of competencies or responsibilities, creating confusion about
roles and career paths. Most firms do not document what it takes for an income
partner to “earn” equity status, leaving income partners in the dark.

Recruiting:

Recruiting any outsider as an income or equity partner risks alienating young up-
and-comers who believe these positions should go to internal candidates. If a firm
lists a lot of income partners on its website, top talent could view the partner
ranks as overcrowded and dismiss the firm as a potential employer.

Retention:

Firms risk losing bright up-and-comers who see a number of income partners
“above” them and surmise that too many people are in the queue ahead of them
for equity partner.

Marketing:

Some firms promote the distinction in levels by calling their non-equity partners
“principals,” “directors,” or something else other than partner. This practice
negates the marketing advantage of having an income partner level.

Governance:

Some firms do not allow enough decisions to include input from income partners.
Compensation:

Many firms do not spell out the income partner compensation program, creating
confusion.  Firms often don’t share the compensation differential between
income partner and equity partner, so there is a lack of clarity about
this. Sometimes, non-equity partners think they are being paid close to what
equity partners make, but without the hassle of the buy-in or other partner-
specific tasks and risks. This can cause non-equity partners to shy away from
committing to full equity partnership.   

Buy/sell:

The firm’s buy-in process has to be “priced” at market value, which many firms
overestimate, making the buy-in cost too steep for income partners. Sometimes
becoming an equity partner does not earn the non-equity partner much more in
overall income, benefits, or authority, so it doesn’t seem worth it to commit to
equity partner. Sometimes, the firm’s equity acquisition process can cause an
income partner to take a pay cut net of buy-in, and many cannot visualize the ROI
of doing so.

Q5. Based on your research and knowledge of the international

market what recommendation would you give for successful
selection and use of alliances in your IB and why?

Answer: Successful selection of alliance in IB:

Based on the research and knowledge of the international market Alliances
between companies are often the result of personal relationships, but for them to
be successful, they have to be approached with strategic criteria.

*Establish criteria for your alliances

*Establish an evaluation process

*Test the partners.

Establish criteria for your alliances

. It is far too easy to be drawn into alliances with companies with whom you have
an existing relationship. At the same time, the allure of aligning with a company
that is widely recognized within your industry can be hard to resist. The most
effective alliances result when each ally has established a set of measurable
criteria with which to evaluate potential partners.  To establish that criteria, each
company needs to look at itself and identify clearly and accurately their
competitive position in the market, their internal strengths and weaknesses, their
plans for product/service innovation and their brand’s equity. The gaps that are
identified during this analysis serve as the criteria for identifying potentially well-
suited allies.

These criteria should be weighted to allow easy scoring; for example, dropping
them into three broad buckets: “must-haves”, “nice-to-haves” and “must-not-
haves”. Our criteria are built around three types of fit: strategic fit, which
addresses complementary strengths and weaknesses; operational fit which
speaks to the ability to successfully integrate systems and processes; and cultural
fit which addresses whether there are shared values between us and our allies.”

Establish an evaluation process. Because the criteria that has been established is
so important to the success of an alliance, there needs to be a mechanism to
ensure it is applied consistently throughout the initial stages of any ally
evaluation. That means: (i) creating an intake process to capture, organize and
manage interest expressed by potential allies; (ii) assigning an individual the
responsibilities and resources required to effectively manage potential allies; and
(iii) creating a cross-functional team that evaluates potential allies against the
chosen criteria.

Test the partners. Strong alliance partners are not created overnight. Even after
all of the criteria and processes are in place, true success comes over a period of
time. As a result, each partnership should start with a well-defined project that
serves to “pilot” the alliance. Ideally, this is a low-risk initiative that helps each
partner learn about the pros and cons of working together with a shared
objective. Lessons learned from these initiatives also help to best match alliance
partners with initiatives that require more resources, longer periods of time,
higher levels of risk and greater potential returns.

Uses of alliance in IB:

Forming a strategic alliance isn’t a walk in the park, but when it’s planned
correctly and the parties commit the right level of leadership and resources, your
architecture, engineering, or construction firm can win work that was previously
out of reach.

Here are ten major benefits of forming a strategic alliance. A strategic alliance
enables your firm to:

1. Gain new client base and add competitive skills. Seek an alliance partner with
a strong specialty reputation to augment a firm’s skill set and create a force that
offers the total package to your clients. Gaining new competitive skills without
incurring the burden of recruiting, paying and caring for new staff is one of the
two top alliance-model sellers.

2. Enter new business territories. Entering new geographic marketplaces with a

partner who knows the ropes in a particular territory is the second top alliance-
model seller because it can shave years off the geographic expansion learning
curve. Seek an alliance partner with well-developed relationships and
complimentary work experience in the territory you are targeting to create a
force that offers a compelling total package to this new geographic marketplace.

3. Create different sources of additional income. Rather than duplicating

resources or outsourcing to non-alliance partners, keep the work in the family by
improving and expanding the resources already available within your own firm to
service your partner.

4. Level industry ups and downs. Use your alliance partners to outsource work
during rises in your or your partner’s marketplace economic cycle. Once your
alliance is up and running and the new team has joint work experience under
their belts, you can help each other out as the markets ebb and flow.
5. Build valuable intellectual capital. If you are trying to dig deeper, think harder.
Be a more holistic client advocate, and ally with a complimentary or even a
competitor firm to create the magic.

6. Affordable alternative to merger/acquisitions. The A/E/C industry is primarily

a collection of small- to medium-sized firms. Leaders of these firms typically strive
on independence and are more than likely reluctant to grow through the merger
or acquisition of others. This model allows interdependence to occur where
mergers and acquisitions is a dependent model, enabling leaders to have their
cake and eat it, too.

7. Reduce risk. Keep doing what you do best. We were educated to understand

that we can do “anything and everything.” The honest truth is—we cannot. But as
a long-term team and collection of others with complimentary talents, we can
come much closer to our ideal of doing anything and everything. 

Clients continue to become more and more attuned to our practices. The whole
concept of “anything and everything” brings with it the baggage of risk and
liability by not always knowing the ultimate consequences of designing some
things for which we need more knowledge. Your alliance partners and you can
actually lower this liability issue if your complimentary skills increase your ability
to delivery higher quality and therefore, a more thorough work product.

8. Leapfrog the competition. Reap the benefits of the hype surrounding “the

federation.” A new alliance in the marketplace can become a formidable new
force for competitors to fear. It will also fascinate clients. Create a solid value
proposition for your new alliance from the start, building on it over time.

9. Gain new resources and improve existing resources. Provide your resource

teams with in-depth training and mentoring without hiring trainers or
consultants.

10. Create a different perception of each firm. For example, many observers may

view your firm as a small firm that specializes in a narrow range of project types.
By entering into a successful alliance with a well-established firm specializing in a
broader range of project types, your firm will likely benefit from the reputation of
the established firm, while creating a softer image for the well-established firm.
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