1. Strategic Alliance

2. Alliance The alliance is a cooperation or collaboration which aims for a synergy. The alliance often involves technology transfer (access to knowledge and expertise), economic specialization, shared expenses and shared risk.

3. “The whole is greater than sum of parts”

4. Strategic alliance A Strategic Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations.

5. Strategic alliance Partners may provide the strategic alliance with resources such as products, distribution channels, manufacturing capability, project funding, capital equipment, knowledge, expertise, or intellectual property. Ex : Star Alliance

6. Partnerships between firms are combined to pursue mutual interests to are combined to pursue mutual interests to DevelopDevelop ManufactureManufacture DistributeDistribute GoodsGoods ServicesServices Firm A Firm B where their Core Competencies Core Competencies Capabilities Resources Strategic Alliances

7. Reasons for Alliances Slow Cycle Market Gain access to a restricted market Establish franchise in a new market Standard Cycle Market Gain market power Gain access to complementary resources Meet competitive challenge Pool resources for large projects Learn new business techniques Fast Cycle Market Fast Maintain market leadership Form an industry technology standard Share risky R&D expenses Increase speed of product, service or market entry

8. Example: Dow Corning from Dow Chemical and Corning Inc. Example: Chrysler and Mitsubishi Automotive Example: Chrysler’s supplier network Types of Strategic Alliances Independent firm is created by the joining assets from two other firms where each contributes 50% of the total Joint Venture Partnership where the two partners do not own equal shares Equity Strategic Alliance Contract is given to supply, produce or distribute a firm’s goods or services (without equity sharing) Non-Equity Strategic Alliance

9. Few Strategic Alliances HeroHonda

10. Reliance and Samsung Reliance and Aaj Tak

11. MarutiSuzuki Ltd.

12. Microsoft and Nokia

13. WHAT NEEDS TO BE DONE? Suggest suitable Strategic Alliances for Praxis Business School – E.g. Spencer’s+ Praxis Retail Program/Concentration – E.g. ICICI + Praxis Analytics Concentration