Analysis of International Business Strategic Alliance Report

This report provides an in-depth analysis of international strategic alliances, examining their role in foreign market expansion and the motivations behind their formation. It explores the benefits and challenges of such alliances, using British Airways and the Oneworld alliance as a case study. The report reviews relevant literature on market entry strategies, emphasizing the growing importance of strategic partnerships in today's globalized business environment. It discusses various motivations for forming alliances, including entering new markets, circumventing barriers, and gaining competitive advantages. The report also covers the benefits of international strategic alliances, such as achieving goals quickly, increasing customer base, and improving brand awareness, as well as the challenges involved. Finally, the report evaluates alternative market entry strategies, providing a comprehensive overview of the topic.

Individual academic report
International Business

Executive summary
Global alliances are referring to the means of achieving one such enhanced procedure,
not so much because they permit them to acquire access to multiple markets across the globe,
and also because they help businesses to reduce their own worldwide competence by using
the capabilities of their allies. International collaborations exist in a variety of industries and
also between enterprises of various sizes. Organizations form alliances for a variety of
reasons, including cost-cutting in manufacturing and research, increasing position in the
market, and gaining access to the intangible resources of other businesses.

Contents
Executive summary.............................................................................................................................2
INTRODUCTION...............................................................................................................................4
LITERATURE REVIEW...................................................................................................................4
Review of the literature related to the use of international strategic alliances in foreign market
expansion...........................................................................................................................................4
Motivations behind the formation of the selected International strategic alliance.............................5
Benefits and challenges of the international strategic alliance selected to the partners involved.......8
suitable alternative market entry strategy..........................................................................................8
ANALYSIS AND DISCUSSION......................................................................................................10
CONCLUSION..................................................................................................................................11
REFERENCES..................................................................................................................................12

INTRODUCTION
An international strategic alliance is often characterized as a cooperation partnership
involving companies located in different nations. After the establishment of an alliance, the
partnering firms retain their legal independence, and the partners connection is considerably
longer. International strategic partnerships can be classified in a variety of ways. Strategic
partnerships have existed since the inception of corporate enterprises, and they are always
beneficial to both parties (Collinson and et. Al., 2020). Such partnerships have been
widespread on a worldwide scale for the last 50 years and have proven to be extremely
beneficial to so many companies. When two or more organizations with diverse domestic
origins come together and combine their resources to pursue a shared goal while maintaining
their own identities, a global strategic alliance is established. These alliances can be created
to either design a product or just to share information. In addition to this, strategic alliances,
partial equity financing, equity exchanges, joint research and development, joint production,
joint marketing, lengthy purchasing partnerships, shared transmission, and guidelines are all
examples of strategic alliances. Current report is based on British Airways, is a famous airline
company that serve their services worldwide in order to established their competitive edge. In
addition to this, the Oneworld alliance, founded in 1999 by American Airlines, British
Airways, Cathay Pacific, and Qantas, was founded by British Airways. Report is going to
discuss about different international strategic alliances and with its benefits and drawback.
LITERATURE REVIEW
Review of the literature related to the use of international strategic alliances in foreign market
expansion
Organizations really want to go international and enter international markets for a
number of reasons, and all these diverse purposes at the moment of entrance should result in
distinct strategies, performance goals, and even influencing purchase forms. Businesses, on
the other hand, frequently follow a typical market entrance and expansion strategy. The most
prevalent is known as the “growing responsibility” strategy of market expansion, wherein the
market entry is accomplished through an active local partner. This internationalization
strategy comes from the desire to establish a business in a foreign country market as soon as
feasible, as well as an initially decision to prevent risk, along with the necessity to understand
about just the national and marketplace from of the ground up (Buckley and Casson, 2019).
Over the last two decades, there has been a tremendous increase in international trade and

cross-border financial activities, which has been accompanied by an expansion in
international banking in recent decades. This has resulted in an increase in both the number of
international bank acquisitions and the extent of activities of foreign branches.
Internationalization is a significant motivator that has resulted in an increase in the number of
business enterprises operating outside of their native country. As with globalisation, trade
obstacles are now being reduced, making doing global business simple.
Strategic alliances have been an important tool for any business that really are
expanding internationally. As a result, the utilization of joint ventures has grown significantly
over the last decade and will continue to grow as business enter the twenty-first century. A
strategic alliance that is not a strategic partnership is established for a specific goal and
operates more narrowly than a joint venture. Non-joint venture trade relationships are less
secure and have shorter lifespans than partnerships. In 1988, United Airlines and British
Airways created a strategic alliance to sell their North American and European services. They
accomplished so just because Delta and American Airlines was eroding their share of the
market. Ultimately, the market moved in a year, and they ended the agreement. It is crucial to
highlight that not all connections among national or international enterprises become strategic
alliances. Licensing, exporting, franchising, and foreign direct investment partnerships are
instances of procedures that do not result in strategic partnerships (Nambisan, Zahra and Luo,
2019). Strategic alliances are essential tools for businesses looking to penetrate new markets.
They are especially useful for huge, unpredictable business possibilities where time to market
is critical. Under such circumstances, a strategic partnership makes sense if it aligns with
firm's market access plan. The decision of strategic partnership is determined by the
company's circumstances and strategic goals. When firms enter a new market, they have
difficulties in competing with local companies and are constrained by their capabilities and
resources.
Motivations behind the formation of the selected International strategic alliance.
Entrepreneurs employ several tactics to build conventional international business in
the market, and among the most prevalent and developing approaches used presently is the
international strategic partnership. Strategic alliances enable both sides to develop unique
advantages. Companies make agreements to collaborate on joint marketing, joint sales or
distributing, integrated system, design collaborations, technology licensing, and R&D.
Increasing strategic partnerships is one of the fastest growing market trends today, because it
is becoming a vital driver of growth for all industries. One of the primary purposes of

forming relationships with other firms is to build a strategic alliance in which they combine
the experience and competencies of both organizations and gain a collaborative enterprise.
Then they go overseas and offer their knowledge. Growing international marketing is now the
standard, but these collaborations are trying to leverage growth through partnerships with
foreign partners, where both delivery of effective and gain competitive advantages (Aguilera
and Grøgaard, 2019). They accomplish this through contractual arrangements, cross-
shareholder agreements, cooperative arrangements, and strategic partnerships. Although the
motivations and reasons for corporations to form strategic partnerships may develop and alter
over time, most companies are adopting alliances when confronted with various
environmental situations. In this context there are various motivations that company use for
forming strategic alliance:
Entering new international markets: Although firms used to be more comfortable
entering new markets through exporting, totally owned subsidiaries, or joint ventures, they
are gradually looking to strategic alliances. Sharing intelligence with local enterprises in a
targeted audience or other foreign corporations familiar with a current economic and political
context gives a growing firm with complementary skills to attain success in market place.
Circumvent foreign market barriers: A company will collaborate with a corporation
that is aware of the local political, economic, legal, and administrative concerns in order to
avoid the hurdles that make it difficult for potential international enterprises to enter that
market. There have been numerous market barriers that can prevent a corporation from
successfully expanding into a desired market.
Defend home market competitive position: A popular strategy among multinational
corporations is to enter into an agreement with another organization in order to reach the
marketplace or other markets where the competition has a significant market share. By
establishing an important market for a competitive company, a corporation attempts to divert
the opposing organization's profits to protecting its home territory rather than acquiring
market share.
Entering new emerging industries: The majority of established organizations have
mature goods and are continuously on the lookout for fresh chances in rising industries.
Companies may be unable to examine these new businesses on their own because they lack
the monetary or other resources required to produce new items efficiently (Sharma and et.
Al., 2020). Many businesses lack the entrepreneurial mindset required to be successful in new

emerging economy. Several partnerships have been formed in the automotive industry at that
time as automakers attempt to develop exceptionally powerful fuel or electric innovations.
Even the greatest international corporations may discover that their product portfolio has
holes. A strong partnership could provide a corporation with a quick opportunity and provide
new items to unknown or proposed clients.
Changing industry structure: Strategic alliances have the potential to completely alter
the position of the organization by bringing combined technological innovations that
dramatically alter the way businesses operate in that market. Retailers are not required to
order fresh inventory, but modern technology alerts manufacturers when the quantity of their
products falls underneath a specific level.
Reduce future competition: Many businesses make strategic partnerships with
competing products in order to avoid the possibility of this organization becoming the major
competitor in the future (Witt, 2019). This is a frequent method used by retailers who are
developing overseas. When a worldwide retailer decides to develop in a certain country, it
frequently forms a partnership with a strong local shop.
Increase available resources: Many businesses form strategic partnerships in order to
take use of their partnerships' production, distribution, or human capital. A company can
avoid making significant investments in its own exclusive technology by leveraging partner
assets. As a result of these partnerships, the company now has the means to enter these
markets despite continuing to spend in costly manufacturing distribution and supply systems.
Acquisition of new skills: When a company realizes that it lacks particular talents, it
may form partnerships in order to learn to its partners. Corporations in developing nations
frequently seek relationships with more advanced companies that can give them with the
necessary advanced technologies.
Gaining competitive advantage from alliances: While almost all businesses
understand the value of partnerships in assisting them discover different markets, product
categories, and technology, for a number of reasons, only a small number of collaborations
genuinely improve a company's competitive advantage. In order to maximize the value of the
collaboration while minimizing the negatives included in any cooperative agreement, a
corporation must closely work with its alliance partner.

Benefits and challenges of the international strategic alliance selected to the partners involved
suitable alternative market entry strategy
Global strategic alliances open up a plethora of new prospects for firms of all sizes. A
business can build the same quality of strategic partnerships as a huge firm due to the
availability of information and communication facilities (Gholipour and Foroughi, 2020).
When two or more organizations desire to build a cooperation with common goals, the best
alliances arise. They understood that collaborative branding enables them to enhance the
accessibility of their vision and goals. As there are some benefits of international strategic
alliance that help company in improving their performance and also attain competitive
growth at market place.
 It permits all parties to attain their goals quickly: When the capabilities of two or
more businesses are mixed together, it would be much simpler to satisfy
measurements or achieve goals than when one company goes it alone. You have the
ability to develop company presence inside your chosen markets, just as their team
members do, which increases the influence of each organization. This is one of the
easiest places for a new company to establish itself in a marketplace or for an
established brand to expand into new markets.
 Increase customer base: Consumers are loyal to a particular brand in which they have
faith. Through this, organization gains their engagement because you consistently
deliver on value offers. When a worldwide strategic partnership is formed, that
allegiance extends to the other corporations in the alliance. With the assistance of this,
company obtains client loyalty from some other alliance leaders as well. This allows
organizations to increase their current demographic base, even if they are in a
developed home economy.
 Improve positive brand awareness: When two or more companies join a partnership,
the good awareness of the brand measures taken by one of the companies will be
reflected on all of those alliance members (Shams and et. Al., 2021). Because this
necessitates multiple layers of responsibility to ensure that clients obtain excellent
quality services with each transaction.
 Improve quality products: Global collaborations bring opportunities for innovation to
established products or service offerings. This provides an opportunity for personal
product or service performance to take a longer time. This not only gives firm and the

alliance an advantage over its competitors, but it also provides an opportunity to
increase revenues.
 Assist in avoiding import/ export controls: Legislation may allow corporations with a
demonstrated worldwide strategic alliance to escape the controls associated in
importing or exporting goods, relying on the home country of the businesses involved.
With that same form of collaboration, certain corporations may be able to dodge
tariffs or entrance fees into foreign markets.
 It is not a merger or an acquisition: An international strategic partnership is preferred
by businesses since it does not alter the official structure of the local governments
participating (Kozubikova and et. Al., 2019). There is no need to go through a proper
merger process or invest money to acquire another company. As, it just begins
cooperating in specified ways, searching for opportunities to pool resources for the
advantage of all alliance members.
 Expand networking opportunities: A international strategic partnership assists
businesses in broadening their global networking pool of contacts. The acquisition of
political contacts throughout this relationship could be one of the most beneficial
benefits of this form of cooperation.
Disadvantage of global strategic alliance:
 Encourage good employee to cross over: Employee crossovers is one of the most
significant disadvantages of a worldwide strategic partnership. When businesses join
forces, you put your firm at danger. You may lose good employees because potential
strategic partners can compensate their top employees more than what they can.
 Create conflict in ownership claims: When two or more companies collaborate to
deliver new products to a market, it might lead to disagreements over who owns the
invention, the manufacturing sites, or the designs and patents concerned
(Koveshnikov, Tienari and Piekkari, 2019). In extreme situations, a global strategic
partnership may disintegrate into disputes and lawsuits.
 Lead to discrepancies of interpretation: When it becomes ready to develop a strategy,
if an agreement is vague when it is worked out, it allows everybody to determine what
the phrasing means. This can cause issues with what each corporation considers is
appropriate to them. It could even lead to arguments on how lengthy the partnership
should last.

ANALYSIS AND DISCUSSION
A strategic alliance is an agreement among two or more firms to collaborate in a
specific economic activity so that one benefits from the other's capabilities and gets a
comparative benefit. Partnerships have been designed to respond to globalization and
increased complexity and uncertainty in the work environment. In this context, the oneworld
alliance brings combines Thirteen of the world's leading airlines to deliver the highest
standards of performance and the quickest interconnections to over 1,000 locations
worldwide. Oneworld application supports collaborate to make their passengers' flying
journeys as easy as possible, from check-in to security and boarding. Furthermore, British
Airways Executive Club Members can earn and pay Avios on eligible oneworld flights, as
well as utilise their benefits and advantages across the partnership. British Airways presently
has four collaborative commercial agreements in place, allowing the airline to provide more
options to its passengers. British Airways, American Airlines, Finnair, and Iberia have joined
together across the Atlantic to make international travel easier and more beneficial for
passengers. Customers can enjoy lower costs and faster connectivity on flights to the United
States, Canada, Mexico, and Europe. usage of any company's website, consolidated customer
service, and a worldwide network.
A corporation experiencing a new market has several alliance choices. Grouping them
into kinds aids in streamlining an approach that best fits the firm's entry strategy plan.
 Single local alliance: To accelerate existing product to a new international market, a
corporation can make an alliance with a local company. The goal is for the new
company to get access to the market in order to exploit its assets, technology, or
products in collaboration with the local partner, who has knowledge of the market and
distributing access. A local partnership is suitable for a late entrant attempting to join
a mature market where demand is high and transmission is tough to get.
 Multiple local alliance: To gain access to certain markets, a corporation can form
alliances with various local partners. This option is useful when the intended audience
is large and divided into various groups. A good example is a market made up of
industry verticals, in which the new entry can form several independent partnerships
without causing conflicting interests.
 Single global alliance: To stay competitive in a worldwide industry, a company may
need to establish a global alliance (Vicente-Ramos and et. Al., 2020). In comparison
to a local alliance, a global alliance can enhance the firm's globalization because it

spans a large geographical area and permits partners to complement each other's key
competencies. A truly universal alliance's goal is for the two current clients to pool
resources and competencies and go to market across the globe coordinating basis.
 Multiple global alliance: Companies seeking to expand their international reach seek
different global alliances to get market access. As with the previous approach, the
corporation attempts to broaden its global appeal through multi-country partnerships,
but this time it aspires to grow through many, autonomous alliances rather than just
one. Firms can gain faster access to different overseas markets by forming multiple
global alliances. Furthermore, having numerous worldwide friends reduces the firm's
uncertainties, with the additional benefit of gathering knowledge and relationships
particular to other markets. These alliances are commonly used in high-tech start-ups
where delivery of products and worldwide presence are critical.
From this, British Airways use Multiple global alliance to expand their business activities
at market place with the aim of generating larger profitability from its competitors.
CONCLUSION
As per preceding report it has been analysed that strategic alliance is an important
aspect that Strategic partnerships are essential tools for businesses looking to penetrate new
markets. They are especially useful for huge, unpredictable business possibilities wherein
time to market is critical. Under those same circumstances, a strategic partnership makes
sense if it aligns with the business's market access plan. The decision of strategic partnership
is determined by the corporation's circumstances and strategic goals. When firms enter new
markets, they have drawbacks in negotiating with local firms and are constrained by their
resources and competencies. Local alliances help to provide advertising understanding of the
area and simplify inventory management in this scenario.

REFERENCES
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