Stonehouse et al. (2004)

Management > Global Strategic Management > Lectures > Independent Research > Stonehouse et al. > Alliances/Integration > Transnational M&A > Problems with integration > Success factors > Collaborative ventures/strategic alliances

Collaborative ventures and strategic alliances

A firm can collaborate with another company to outsource non-core activities. Acquisition of competitive advantages through collaborative ventures and strategic alliances requires:

Identity of core competences of the firm
Identity and focus on key activities and outsourcing the non-core activities
Achieving internal/external linkages in the value or supply chain, which are necessary for the co-ordination of activities and increased responsiveness

Motivations for forming alliances:

Sharing of different, but linked core competences
International expansion and market entry - an in-depth knowledge of foreign markets is essential when expanding
Vertical quasi-integration, which allows access to resources, skills, materials etc.
Risk sharing
Acquisition of economies of scale and scope
Access to complementary technologies and technological developments
Blocking/reduction of competition
Overcoming trade barriers

Collaborate venture - always entered into willingly these can be vertical backward/upstream, vertical forward/downstream, horizontal or diversified

Shared alliances - some are more short term. Those which are long term are synergetic in the creation of a new company, which is dependent on specific objectives of each participant

Types

Successful alliances and networks

Strategic management of networks and alliances