International Strategic Alliances - PDF
Added on 2021-04-19
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Running head: INTERNATIONAL STRATEGIC ALLIANCESInternational strategic alliancesName of the studentName of the universityAuthor note
1INTERNATIONAL STRATEGIC ALLIANCESIntroduction In the current business scenario, one of the major challenges being faced by themultinational organizations is dealing with the cross cultural issue. This is due to the reason thatin case of the cross border businesses, different involved stakeholders will have different set ofthe cultural and social elements. There is always higher probability of emergence of conflictamong the partners in the international strategic alliances (Brouthers, Nakos & Dimitratos,2015). In majority of the cases, it is being seen that strategic alliances get failed due to theconflict between the partners in the strategic alliances. This essay will discuss about five major steps that can help in enhancing the effectivenessthis of the international strategic alliances for the business organizations. In addition, the crosscultural issues will also be concentrated more discussing the steps. Initiation of effective strategy Prior to the initiation of the strategic alliances in the international business, it is importantfor the business organizations to determine the most reliable and effective mode for entering inthe foreign markets. This is due to the reason that there are number of situations where strategicalliances such as mergers and joint ventures are not important (Lew & Sinkovics, 2013). Thus, itis recommended that business organizations should have the full fledged strategy prior toentering in the global market. The more effective will be the strategy, the more will be the clearunderstanding with the organizations regarding the strategies to be initiated. In addition, in caseof initiation of strategic alliances, business organizations should have specific and clearstrategies regarding how to select partners.
2INTERNATIONAL STRATEGIC ALLIANCESThe strategies should also include establishing joint objectives with the partners. This isdue to the reason that the new objectives that should be initiated in the strategic alliances shouldhave the consent of all the partners involves. This will further help in having the effectiveconsiderations of all the differentiating factors among the partners in the alliance (Li, Qian &Qian, 2013). Majority of the differences between the partners in the strategic alliances emergefrom the cultural differences and the economical and political differences between the home andhost country. By stating the joint objectives, all these factors of the partners can be addressed andall the partners will have the similar level of interest in the alliance. Cost and benefit analysisAnother major and important for the step that should be initiated in order to haveeffective strategic alliances is cost and benefit analysis. Initiation of the cost and benefit analysiswill help the business organizations to negotiate the deal with their partners in terms of cost andbenefit (Coates, 2014). It will also help all the involved parties in the alliance to have the fairidea about the potential risk and benefit. In addition, it will also help to overcome the issuesrelated to the different cultures. This is due to the reason that in case of the cost and benefitanalysis, the cultural differences between the partners and how they will get benefited from thestrategic alliances. This will in turn reduce the probability of having differences between thepartners in the long term (Beukers, Bertolini & Te Brommelstroet, 2014). Moreover, it is alsoimportant for the partners to have the clear understanding about the chances of getting morebenefits compared to the incursion of cost. This is due to the reason that strategic alliances willbe successful only if the benefits will be more than the cost and vice versa.
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