International Strategic Alliances Griffin & Pustay 13-1 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall International Business, 6th Edition chapter 13 Chapter Objectives • Compare joint ventures and other forms of strategic alliances • Characterize the benefits of strategic alliances • Describe the scope of strategic alliances 13-2 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Chapter Objectives (continued) • Discuss the forms of management used for strategic alliances • Identify the limitations of strategic alliances 13-3 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Strategic Alliances A strategic alliance is a business arrangement whereby two or more firms choose to cooperate for their mutual benefit 13-4 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall 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 13-5 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.1 Benefits of Strategic Alliances Potential Benefits of Strategic Alliances Ease of Market Entry 13-6 Shared Risk Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Shared Synergy Knowledge and and Competitive Expertise Advantage Map 13.1 Namibia and Joint Ventures 13-7 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Scope of Strategic Alliances • Significant variation – Comprehensive alliance – Narrowly defined alliance • Degree of collaboration depends upon basic goals of each partner 13-8 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.2 The Scope of Strategic Alliances 13-9 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Types of Functional Alliances Production Alliances Marketing Alliances Financial Alliances Research & Development Alliances 13-10 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Issues in the Implementation of Strategic Alliances Partner Selection Form of Ownership 13-11 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Joint Management Factors Affecting Partner Selection Compatibility Nature of Partner’s Products or Services Relative Safeness Learning Potential 13-12 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Approaches to Joint Management Shared Management Agreements Assigned Arrangements Delegated Arrangements 13-13 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.3a Shared Management Agreement Partner Partner Both parties are active participants Alliance 13-14 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.3b Assigned Arrangement Partner Partner One partner takes primary responsibility Alliance 13-15 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.3c Delegated Arrangement Partner Partner Joint venture 13-16 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13.4 Pitfalls of Strategic Alliances 13-17 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher Printed in the United States of America Copyright © 2010 Pearson Education, Inc publishing as Prentice Hall ... parents 13- 5 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13. 1 Benefits of Strategic Alliances Potential Benefits of Strategic Alliances Ease of Market Entry 13- 6 Shared... depends upon basic goals of each partner 13- 8 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Figure 13. 2 The Scope of Strategic Alliances 13- 9 Copyright 2010 Pearson Education,... Potential 13- 12 Copyright 2010 Pearson Education, Inc publishing as Prentice Hall Approaches to Joint Management Shared Management Agreements Assigned Arrangements Delegated Arrangements 13- 13 Copyright