Marketing Methods to Improve Company Strategy by unknow

Author:unknow
Language: eng
Format: epub
Tags: Economics, Finance, Business & Industry
Publisher: Taylor & Francis Group
Published: 2010-01-22T00:00:00+00:00

7.1 Introduction

Strategic alliance is a flexible way to access complementary resources and skills that reside in other companies.1 Gulati (1998) defines strategic alliances as “voluntary arrangements between firms involving exchange, sharing, or co-development of products, technologies, or services. They can occur as a result of a wide range of motives and goals, take a variety of forms, and occur across vertical and horizontal boundaries.”

Joint ventures are a special type of alliance in which a new firm is created and owned by the alliance partners. Joint ventures can help managers deal with risk in uncertain markets, share the cost of largescale capital investments, and inject new-found entrepreneurial spirit into a maturing business.2

Over the last few years, thousands of joint ventures and alliances have been launched worldwide. However, there are still a lot of companies that fail in forming joint ventures. The question that often strikes managers is how to plan, implement, and overcome the many challenges inherent in forming joint ventures.

Given the complexity of joint ventures, a framework to guide the implementation can be a helpful tool. From a strategic standpoint, the implementation of joint ventures can be set up by looking at the sequence of events through the formation. This sequence includes the following seven steps: the historical analysis of the relationship, definition of market opportunities, analysis of the core competence, definition of the objective of each participant, analysis of the alternatives of coordination forms, evaluation of the critical success factors, and the design of the relationship management. The objective here is to discuss this seven-step framework to build joint ventures. We also attempt to characterize the framework for academics and practitioners to evaluate the potential for joint ventures in the future, as well as evaluate past failures and successes of joint ventures initiatives.

To accomplish this objective, a review was conducted on the literature of strategic alliances and complemented with topics about marketing channels, transactions cost economics, marketing research, and strategic management. In this chapter, to illustrate the proposed framework, a case study was developed. Two companies were followed throughout the years 2004 and 2005 in the alliance formation.

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