Strategic Alliance

Advantages and Disadvantages of Strategic Alliance

Advantages of partnership for foreign partners:

1. They gain better access to attractive country market

2. Take advantages of partner’s local market knowledge and relationship

3. Capture economies of scale in production and/or marketing

4. Fill gaps in technical expertise or knowledge

5. Share distribution facilities and dealer networks.

6. Direct combined competitive energies

7. Useful way to gain agreement on important technical standards.

8. Can reduce the cost and more efficient to penetrate the market by doing the                             following:

·         Joint research efforts

·         Technology – sharing

·         Joint use of production and distribution facilities.

The Drawback / Disadvantages ofpartnership:

1. Dealing with diverse and conflicting operating practices
2. mistrust
3. clash of egos and company cultures
4. dealing with conflicting objectives , strategies, corporate values , and ethical standards
5. becoming too dependent on another firm for essential expertise over the long term

Comments:

In this topic I learn advantages and disadvantages when we built business alliance  with other partner, if we join with other partner we have many advantages and our corporate more faster growing than we business in our corporate alone .

Although we can get many advantages in there we must know, there is many disadvantages too. For example mistrust, clash of ego and becoming too dependent on another firm for essential expertise over the long term.