Sunday 27 February 2011

Strategic Alliances u5p91 & reader p355 - hitt 2003

Stimulii for creating partnerships may be external or internal, and include globalisation and intense competition necessitating a need to maximise resources, overcome resource shortfalls, gain time, improve competitive positions etc. because:-


organic growth will be too slow and faster penetration and exploitation of key markets is needed.

alliances create opportunities to grown in directions which may not be possible for one partner alone

potential payoffs are felt to offset the costs and risks of collaboration

alliances can grant immediate access to markets/resources/funds/skills/tech

economies of scale can lead to cost reductions for both partners

synergies can be created through blending complementary strengths or assets

there may be a need for complex resource bundles

an alliance can lead to safety by spreading financial risk, sharing novelty risks, reducing political risk, reducing market volatility, rationalising standards or influencing new industry developments

an alliance can be a strategic defence.

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