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chapter 13

International Strategic Alliances

International Business, 6th E

dition

Griffin & PustayCopyright 2010 Pearson Education, Inc. publishing as Prentice Hall

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Chapter Objectives

• Compare joint ventures and other forms of strategic alliances

• Characterize the benefits of strategic alliances

• Describe the scope of strategic alliances

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Chapter Objectives (continued)

• Discuss the forms of management used for strategic alliances

• Identify the limitations of strategic alliances

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Strategic Alliances

A strategic alliance is a business

arrangement whereby two or more

firms choose to cooperate for their

mutual benefit.

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Joint Venture

A joint venture (JV) is a special type

of strategic alliance in which two or

more firms join together to create a

new business entity that is legally

separate and distinct from its parents.

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Figure 13.1 Benefits of Strategic Alliances

Potential Benefitsof Strategic Alliances

Ease ofMarketEntry

SharedRisk

Shared Knowledge

andExpertise

Synergyand

CompetitiveAdvantage

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Map 13.1 Namibia and Joint Ventures

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Scope of Strategic Alliances

• Significant variation

– Comprehensive alliance

– Narrowly defined alliance

• Degree of collaboration depends upon basic goals of each partner

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Figure 13.2 The Scope of Strategic Alliances

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Types of Functional Alliances

Production Alliances

Marketing Alliances

Financial Alliances

Research & Development Alliances

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Issues in the Implementation of Strategic Alliances

Partner Selection

JointManagement

Form ofOwnership

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Factors Affecting Partner Selection

CompatibilityNature of Partner’s Products or Services

Relative Safeness Learning Potential

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Approaches to Joint Management

Shared Management Agreements

Delegated Arrangements

Assigned Arrangements

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Figure 13.3a Shared Management Agreement

Partner 1

Partner 2

Alliance

Both parties are active participants

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Figure 13.3b Assigned Arrangement

Partner 1

Partner 2

Alliance

One partner takes primary responsibility

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Figure 13.3c Delegated Arrangement

Partner 1

Partner 2

Joint venture

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Figure 13.4 Pitfalls of Strategic Alliances

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Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall