External Partner Collaboration: Advantages and Disadvantages Analysis

This report provides an analysis of the advantages and disadvantages of collaborating with external partners in a business context. It explores how globalization drives businesses to seek external collaborations for growth and innovation. The report highlights the benefits of such collaborations, including access to effective human resources, enhanced marketing capabilities, and improved strategy formulation. It uses case studies like Dyesol and Tata to illustrate these advantages. However, the report also acknowledges the disadvantages, such as increased risk, the challenges of change management, and the complexity of operations. The report references various academic sources and online resources to support its findings, providing a comprehensive overview of the topic. The report also emphasizes the importance of understanding both the benefits and drawbacks to make informed decisions about external partnerships.

Question

TABLE OF CONTENTS
Advantages and disadvantages of collaborating with external partners..........................................3
Advantages.............................................................................................................................3
Disadvantages.........................................................................................................................4
REFERENCES................................................................................................................................6

Advantages and disadvantages of collaborating with external partners
In the current era of globalization, it can be assessed that businesses are safeguarded from
the risk of carrying out trade activities outside the regional or national boundaries. However,
enhancing the connectivity of enterprise among the domestic boundaries helps in achieving
growth and sustainability. Thus, collaboration among external businesses is one of the crucial
factors that lead to attain successful integration and develop effective innovation within firm
(Boons and Lüdeke-Freund, 2013). It involves both internal and external collaboration among
businesses and become partners in order to execute the operations and enhance productivity and
profitability. Globalization is the main cause of such collaboration and thus it leads businesses to
operate jointly and develop effective relationship with one another. In regard to this,
collaboration with external partners helps in evaluating the way of operations and utilizing
resources effectively and efficiently. Main aim of collaboration is to involve people to get
together in a way that provides tangible benefits to organization while facilitating business
objectives. Further, it also provides opportunity to expand the business operations and improve
the system by involving different elements within enterprise (Sandoval-Almazan and Gil-Garcia,
2012). However, collaborating with external partners helps in building relationship with
customers, enhance revenue, product development and enhance customer service etc. It can be
assessed that collaboration with external partners possesses both advantages and disadvantages
which are as follows-
Advantages Effective human resources- It is essential for every business enterprise to gain effective
human resources so that they can achieve competitive edge over other rivals. It also helps
in decreasing the risk of failure by providing best services to consumers and gaining
satisfaction. However, at the time of collaboration, personnel play a crucial role in
improving the relationship among companies. For instance, it is essential for businesses
to collaborate with external partners in regard to grow and sustain in the competitive
market. It assists in minimizing the cost and efforts that can be utilized in certain other
areas so that best results can be attained (Singhal and et. al., 2013). In the given case
study, Dyesol and Tata undergo a joint venture that helps both the organization to access
the capital and financial resources. Thus, utilizing such benefits with the help of joint

venture it helps Dyesol to obtain required resources from Tata Company. Furthermore,
Dyesol also collaborates with Pilkington which is a multinational glass manufacturer and
it enables firm to provide effective manufacturing solution such as delivering high quality
flat glass that enhances the productivity of working of enterprise. Marketing- Moreover, it is essential for every organization to undertake effective
marketing strategy so that they can improve their repeat sales and profitability. Beside,
manufacturing and production, marketing is the crucial tool that requires enhancement in
regard to make the product available at right place. Marketing is the best way that helps
in providing solution to firm and improve their offerings to enhance customer base
(Ramanathan, 2014). With the help of collaboration or joint venture it helps in reaching
to large set of people. For example, collaboration of Dyesol with Tata group has helped
firm to develop awareness among consumers regarding DSC (Dye-sensitized solar cell)
and the extent of its utility. Also, with the help of marketing, business can promote the
use of this technology in external markets to reach best results. In addition to this,
business also carries out joint venture with Pilkington that helped them to increase its
marketing ability by using architectural glass in order to create photo-voltaic
functionality that makes customers belief stronger in the product and rely upon
innovative technology (Hansen, 2013).
 Strategy formulation- It is essential for organization to pool out different opinions and
knowledge for the single project in order to build solutions for both internal and external
partners. It helps in enhancing both revenue generation and profitability of firm. For
instance, entering into the agreements of joint venture it involves formulating effective
strategy so that best action plan can be developed. Also, it helps in facilitating the
efficiency of both the organizations by involving resources to achieve results. As per the
case study, Dyesol is collaborating with the 5th largest steel manufacturing firm to
develop venture in different part of the world. Further, Dyesol adopts effective
collaboration with industrial firm Pilkington in key markets that helps Dyesol to adopt
innovative technology (Ginn, 2013).
Disadvantages Risk enhancement- Here, it assesses that when different businesses work jointly in order
to achieve desired goals and objectives, there are varied disadvantages involved within

parties. Thus, it affects their credibility and also weakens the security and privacy of
organization as there is a high risk involved due to involving external partners. According
to the case study of Dyesol, it can be stated that their collaboration with the Tata group
increases the level of risk (Reeves and Read, 2013). For instance, Dyesol is the main
supplier of technology to other businesses in regard to establish it's commercially to earn
profits. Thus, it obtains patent rights of technology in regard to secure its risk. It also
creates threats for Dyesol such as enhancing competition in future by declining the
technology used by organization. Change management- Further, it is essential that whenever there is collaboration among
two businesses it is essential to develop connectivity among individual in regard to
consumer needs, organization culture and structure etc. Thus, it is significant for business
to maintain required changes so that best relationship can be developed. In regard to
maintain such changes, it challenges workers to effectively deal with change management
and attain desired goals (Working with external partners. 2016).
 Complexity of functions- Here, it states that collaboration with external parties leads to
develop complexity of functions within business as well as related partners. However, it
hinders the smoothness of supply chain management system because of transfer of human
resources, deficiency of resources, insufficient capital etc. As per the case, Dyesol is the
manufacturing firm owns certain required elements, further when there is collaboration
with other group i.e. Tata or Pilkington it influences the working as it requires different
elements to be involves within firm and thus affects the functioning of business
(Carnwell and Carson, 2007).

REFERENCES
Books and Journals
Boons, F. and Lüdeke-Freund, F., 2013. Business models for sustainable innovation: state-of-
the-art and steps towards a research agenda. Journal of Cleaner Production. 45. pp.9-19.
Ginn, W., 2013. Investing in nature: case studies of land conservation in collaboration with
business. Island Press.
Hansen, M., 2013. Collaboration: How leaders avoid the traps, build common ground, and reap
big results. Harvard Business Press.
Ramanathan, U., 2014. Performance of supply chain collaboration–A simulation study. Expert
Systems with Applications. 41(1). pp.210-220.
Reeves, B. and Read, J. L., 2013. Total engagement: How games and virtual worlds are
changing the way people work and businesses compete. Harvard Business Press.
Sandoval-Almazan, R. and Gil-Garcia, J. R., 2012. Are government internet portals evolving
towards more interaction, participation, and collaboration? Revisiting the rhetoric of e-
government among municipalities. Government Information Quarterly. 29. pp.S72-S81.
Singhal, M. and et. al., 2013. Collaboration in multicloud computing environments: Framework
and security issues. Computer. (2). pp.76-84.
Online
Carnwell, R. and Carson, A., 2007. The concepts of partnership and collaboration. [PDF].
Available through:
<https://www.mheducation.co.uk/openup/chapters/9780335229116.pdf>. [Accessed on
8 Feb 2016].
Working with external partners. 2016. [Online]. Available through: <http://www.global-
integration.com/working-with-external-partners/>. [Accessed on 8 Feb 2016].