Firms motivations to create alliances
Summary :
Table of Contents
- Introduction.
- Joint ventures and its concept.
- Contract of partnership in specific functions and ownership of capital.
- The notion of dividing risks and technological development.
- Production and economies of scales.
- Shaping the competitive environment as the first external reason for companies to enter alliances.
- Overcoming protectionist barriers as the second reason for strategic alliances.
- The relational risk in strategic alliances.
- The benefits of productivity of knowledge.
- Conclusion.
- References.
Abstract
More and more companies are recognising that to gain a competitive advantage they may have to enter into alliances with other firms. Referring to examples, identify possible motivations for entering into a strategic alliance and then critically evaluate the possible problems that may be encountered and how to overcome these problems. According to David A. Aaker (2001:277), we may differentiate between alliances and strategic alliances. The author states that an alliance may be defined as "a voluntary association that furthers the common interests of the constituent members. On the other hand, a strategic alliance may be defined as "at least two companies or partners voluntary combining value chain activities, architecture, and value chain linkages for the purpose of increasing individual and collective value addition, increasing competitive advantage, and achieving agreed or common objectives. In this essay, we will focus on strategic alliances. In the first part, we will point out what different alliances can be spotted and what motivations may bring companies to enter strategic alliances. Then, in the second and last part, we will highlight the possible problems that may be encountered when entering strategic alliances and how to overcome these problems.
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