STRATEGIC ALLIANCE

Presented By;-1)Asma Khan

2)Madhura Girase
3)Sandhya Bharti
4)Kiran Porje
5)Suchitra Nikam
 Definition of Strategic alliances
• Strategic alliances are cooperative agreements
between two or more companies to work
together and share resources to achieve a
common business objective, Each company
maintains its autonomy while gaining a new
opportunity • A global strategic alliance is an
agreement among two or more independent firm
to co-operate for the purpose of achieving
common goal such as a competitive advantage or
customer value creation while remaining
independent.
 Motives for Alliances
• You can’t do everything.
• Adding value to product.
• Improving market access.
• Strengthening operations.
• Adding technological strength.
• Enhancing strategic growth.
• Building finance strength.
• New market entry
 WHY STRATEGIC ALLIANCE..?
• Sharing resources like products, distribution
channels, manufacturing capability, project
funding, capital equipment, knowledge,
expertise, or intellectual property, to create
Synergy to gain Competitive Advantage
• “Our success has really been based on
partnerships from the very beginning.” Bill
Gates
 Purposes of Strategic Alliances
• Alliances enable buying & supplying firms to
combine their individual strengths & work
together to reduce non-value-adding activities
& facilitate improved performance.
• In order for both parties to remain committed
to this form of relationship, mutual benefit
must exist (i.e. a "win-win" relationship)
KEY FACTORS OF STRATEGIC ALLIANCE
• Select the proper partners for the intended goals
• Share the right information
• Negotiate A deal that includes risk and benefit
• Come to a realistic agreement on the time
• Mutual, flexible commitment on what's suitable
to change, measure and share within each
partner's culture
• Respect and protect the brand of each partner
 Types of Strategic Alliances
• Joint Venture: an agreement by two or more
parties to form a single entity to undertake a
certain project. Each of the businesses has an
equity stake in the individual business and share
revenues, expenses & profits.
• Global Strategic Alliances: working partnerships
between companies (often more than 2) across
national boundaries & increasingly across
industries. Sometimes formed between company
& a foreign government, or among companies &
governments
 Types of Strategic Alliances
• Equity strategic alliance: an alliance in which 2 or
more firms own different percentages of the
company they have formed by combining some
of their resources & capabilities to create a
competitive advantage.
• Non- equity strategic alliance: an alliance in which
2 or more firms develop a contractual-
relationship to share some of their unique
resources & capabilities to create a competitive
advantage.
 ADVANTAGES
• Improve organization efficiency.
• Offer to access new market and technologies.
• Reduce the impact of risk.
• Learning from partners
• Alliance could help a company develop a more
effective process expand into a new market or
develop an advantage over a competitor.
 Disadvantages
• Significant differences between the objectives
• Irreconcilable differences in business culture
and management styles.
• Loss of control over such important issues as
product quality, operating costs, employees,
etc
 Examples of Alliances Starbucks
• Starbucks partnered with Barnes and Nobles
bookstores in 1993 to provide inhouse coffee
shops, benefiting both retailers.
• In 1996, Starbucks partnered with Pepsico to
bottle, distribute and sell the popular
coffeebased drink, Frappacino.
• A Starbucks-United Airlines alliance has
resulted in their coffee being offered on flights
with the Starbucks logo on the cups
THANK YOU.