An Analysis of International Strategic Alliances for Market Growth

This report provides an in-depth analysis of international strategic alliances as a crucial market entry strategy for global business expansion. It begins with a critical review of the literature, exploring how these alliances facilitate foreign market expansion. The report delves into the motivations behind forming such alliances, using examples like the airline industry's SkyTeam, Star Alliance, and Oneworld to illustrate the benefits of collaboration. It assesses the advantages, such as expanded customer bases and increased innovation, and the challenges, including potential employee crossover, associated with strategic alliances for all partners involved. Finally, the report proposes alternative market entry strategies and offers recommendations for optimizing the effectiveness of these alliances in achieving business growth objectives. The report covers various aspects of joint ventures, global trade patterns, market preference tools, risk minimization, and the overall framework for business experience, with a focus on strategic alliances' suitability, advantages, and challenges in the international business environment.

Individual Academic
Report

EXECUTIVE SUMMARY
During development of globalisation there had been several issues regarding its blessings.
However, it has brought important adjustments in all segments of human life and International
enterprise is one location inside it worried and contributed specifically. Organisations all through
the globe are currently framing their advertising approach majorly after inclusive of the trends in
worldwide marketplace in region of domestic marketplace. Regarding growth and global
operation, the project considers marketplace get right of entry to method like strategic alliance. A
strategic alliance is a settlement amongst separate business entities to pool sources with a view to
obtain a common intention. In strategic alliances, the members live separate and do not shape a
modern-day entity as with joint ventures and a few different kinds of partnerships. They keep
autonomy and typically embark on finite obligations, in location of an ongoing business
company courting. The targets of a strategic alliance can be explored the various synergies which
may be acquired by way of way of operating collectively, mainly in a tremendous area or
enterprise. Strategic alliances are increasingly used by corporations that want to discover a way
to grow to be more competitive. Working strategically, in spite of a competitor, affords an
enterprise with an access to extra of the marketplace proportion. The center of those gadget is to
boom the enterprise boom choice in numerous nations as an awful lot as viable. The entire
dialogue is about joint undertaking as a marketplace get entry to and enlargement device in
worldwide business surroundings.

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Demonstrate a critical review of the literature related to the use of international strategic
alliance in foreign market expansion...........................................................................................1
Demonstrate an understanding of the motivations behind the formation of the selected
International strategic alliance.....................................................................................................3
A critical assessment of the advantages and challenges of the international strategic alliance
chosen to the partners involved...................................................................................................4
Propose a suitable alternative market entry strategy in recommendations..................................5
ANALYIS AND DISCUSSION......................................................................................................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
International organisation is usually alternate carried on across or past the geographical
boundary of the country. When a long-time order make enlargement and keep on exchange in
diverse international places or even multiple nation, it's far concerned in international employer.
It can be either opening their private department in the other nation or via using the approach of
mergers and acquisitions. The business corporations remember exclusive marketplace strategies
or strategies like partnership, international strategic alliance, merger, joint assignment and so
forth. In term of going for walks their industrial company in at worldwide scale. Joint assignment
is vital equipment which useful resource firms in carry out their agency operations and
movements with plenty less chance. Star Alliance, SkyTeam and Oneworld, are three strategic
alliance in airline sector, in order of size. They make connections and mileage collecting and
spending easier. Since their appearance in the late 1990s, they have been a welcome innovation
for flyers that have elite status, which gets recognized by all partner airlines. This written
document will offer a reason behind about the agency practices and how they mentioned by way
of way of macro environment forces as well as factors of worldwide environment. Further, it'll
talk about global exchange sample, market preference tool, and marketplace get entry to
techniques, technique of risk minimisation and the framework to workplace experience.
Moreover, it will in brief describe the strategic alliance as a tool of market access and business
enterprise boom with its suitability, experts and demanding situations.
MAIN BODY
Demonstrate a critical review of the literature related to the use of international strategic alliance
in foreign market expansion
As per the view of Boon T. (2020), an alliance is a conformity among many airways to pool
assets. This move, in flip, offers them a superior capacity to contend towards other airways. The
first gain this brings is codeshare flights. While codeshare agreements do exist outdoor of
alliances, the uppermost compactness might be discovered within alliance members.
International strategic alliance is generally described as a collaborative association among
corporations founded in extraordinary nations. Partnering corporations continue to be legally
impartial after the formation of alliance and the alliance dating is exceptionally enduring.
1

International strategic alliances can be categorized along a couple of dimensions (Aggarwal and
Kapoor, 2018).
SkyTeam is strolling through the facts of what advantages might be protected on this
platform to sell association with hybrid or LCCs, in addition to what the turning into a member
of criteria will be. But SkyTeam is obvious on what functionality hybrid or LCCs on the lookout
for affiliation through this platform can be categorized as. “We will now not motive them to
people of the alliance. They might be best partners but not people,” SkyTeam chairman Leo van
Wijk remarked at the 2012 IATA AGM in Beijing. Nor could SkyTeam go through in thoughts
reintroducing its "associate member" magnificence. In 2010 SkyTeam transformed partner
individuals Air Europe and Kenya Airways to full individuals. While dependable nomenclature
can also moreover set the hybrid or LCCs other than member corporations, this distinction might
not be clean to the marketplace – and that has benefits. SkyTeam and its organizations also can
furthermore want to say affiliation with the hybrid or LCCs, growing scope and coverage. While
SkyTeam can also choice for such companies to be whole humans, alliance membership may
also moreover in all likelihood require extra funding than such lean carriers are inclined to make.
Alliance membership regularly comes with barriers on which great airways a member can
companion with. A hybrid or LCC with a sturdy domestic feature will be appealing to any global
company looking for neighborhood feed, and alliance membership must in all likelihood
restriction the provider to at least one grouping of companies. Virgin Australia as an example has
deep partnerships with one SkyTeam provider (Delta and a 2nd, Aerolineas Argentinas, is
aiming to enhance its present interline dating with Virgin Australia into a codeshare), in Star
Alliance (Air New Zealand and Singapore Airlines) and one unbiased (Etihad). Choosing an
alliance need to limit its functionality to select the carriers that can provide the most to it. Not
being a member of the alliance should moreover suggest the hybrid and LCCs couldn't have to
spend the time and sources concerned in alliance manage, that may embody meetings and
strolling groups. Not appealing inside the ones need to find out a carrier having to sign up for
recommendations it does now not honestly take delivery of as actual with.
Demonstrate an understanding of the motivations behind the formation of the selected
International strategic alliance
An alliance may be described as a business to enterprise collaboration. In an alliance or
more businesses conform to paintings collectively to attain a not unusual purpose while not
2

losing their individuality. Strategic alliance helps the both parties to benefit the complementary
strengths (Shijaku, Larraza-Kintana and Urtasun-Alonso, 2020). Three most important strategic
alliances exist: Star Alliance, SkyTeam and Oneworld. These worldwide alliances account for
61% of worldwide profits and promise many blessings: expanded connectivity, price economic
financial savings and a greater high quality patron experience thru a regular degree of company.
SkyTeam Europe Pass, aimed at passengers traveling to European locations, mainly for
holiday purposes. This personalised ticketing system has provided a new measurement for
SkyTeam passengers to visit specific places on the European continent. The SkyTeam Europe
Pass presents the convenience and velocity, cut price costs and more flight miles for each
flight course. SkyTeam brought America Pass service In July 2004 and Asia Pass carrier In
October 2005 to the flight community portfolio. Also, SkyTeam contains SkyTeam
Cargo.Members have the possibility to save on fees thanks to the synergy created by
means of the sharing of three or greater member airways in the identical area. For
instance, combining not unusual placement and body of workers of test-in areas reduces cost of
ground offerings and personnel at the same time as making sure efficiency. All commonplace
SkyTeam members percentage services at the airport, from test-in counters, self-carrier kiosks
and baggage shipping regions to SkyTeam’s first distinctive test-in place. Members can acquire
a broader logo recognition and exposure, improve market positioning, and boom access to
new points; uses Sky Team’s structure to growth customer service, price savings and records
sharing. Member manufacturers growth the global presence of the partnership and strengthen
emblem attention while achieving the important thing regions of the sector. Through alliance,
member airways gain from each statistics sharing and sharing of first-class practices, in
particular in security, consumer provider and operational efficiency. The maximum important
detail of SkyTeam’s worldwide community is the precise hub and observed a specific
connection and comfort for clients to reach their vacation spot at any point of the world using
their member airlines. The SkyTeam ID represents no longer simplest the duty of each member
airline to the alliance partnership, but also the responsibility to provide excessive satisfactory
service to its clients.Looking at the corporate social duty sports of the SkyTeam alliance, it's
miles visible that it additionally includes out environmental and social duty activities while
making a earnings. It is said that there's organizational justice many of the personnel, and
3

employees are given environmental sustainability awareness schooling. The following are a
number of the most commonplace motivations for starting up and forming strategic alliances:
Changing enterprise shape- Strategic alliances can absolutely regulate the shape of an
industry through bringing together new technology to appreciably alternate the manner groups
function in that industry. Large Shops including Target have correctly used era in current years
to shape close strategic alliances with their suppliers. Retailers ought not to order new products
however new technology affords providers with statistics of when portions of their products fall
underneath a positive level.
Reduce destiny competition- Many agencies form strategic alliances with capability
competitors with the intention to put off the capability of this organization turning into a future
direct competitor. This is a very not unusual method amongst the world over increasing retailers.
When an global retailer expands in a selected market, in many instances it comes to a decision
shape an alliance with a huge nearby retailer.
A critical assessment of the advantages and challenges of the international strategic alliance
chosen to the partners involved
According to Gaille B. (2018), international strategic alliances proffer brilliant new
possibilities for corporations of any dimension. Thanks to the supply of conversation and
statistics-sharing belongings, a startup can form the equal awesome of alliances internationally as
a huge enterprise.
Benefits of Strategic alliance:
It expands your purchaser base: individuals are dependable to the producers that they
agree with. Your enterprise be paid their commercial corporation due to the fact they’re capable
of fulfill price propositions on a regular foundation (Mamédio and et. Al., 2019). When they
shape a worldwide strategic alliance, that faithfulness enlarges to the opposite agencies in the
alliance. At the identical time, their corporation profits the allegiance of the clients from the
possibility alliance individuals too. That builds it probable to enlarge their modern demographic
base, even if they are in a grown-up household marketplace.
It offers get entry to more levels of innovation: clients are normally seeking out the high-
quality rate viable. In an ideal world, they might continuously select the business enterprise with
the most know-how to split. In the real global, consumers equilibrium the exceptional of
statistics with the charge they may be compelled to disburse When they’re capable of shape an
4

alliance with extraordinary corporations, their resources is able to bypass in addition than if they
had been growing sources for their personal. That outcomes in services or products that have
extra innovation, which offers clients with extra fee, and that may be a path which ends up in
higher effects.
Drawbacks of strategic alliance:
It also can encourage wonderful employees to cross over: One of the maximum critical
risks that take region interior an international strategic alliance is the crossover of personnel.
When agencies come together, you are setting your agency at threat. They would in all likelihood
lose proper people due to the fact their strategic companions are able to pay your super human
beings extra than you may control to pay for to pay them (Ferreira and Franco, 2019). It might be
stuck handling mistreatment in their settlement thru your associate. Some organizations even use
those alliances as a manner to poach know-how, without regard to the fitness of the possibility
enterprise business enterprise company.
It can create conflicts in ownership claims: When two businesses art work collectively
to preserve new services or products to a selected marketplace, it from time to time creates war
nearly about who has the rights over the product, the manufacturing net net web sites, or the
patents and logos which may be worried. In immoderate instances, a international strategic
alliance can damage down into court docket docket instances and litigation, which reduces all of
the blessings which might be feasible with this form of agreement want to it arise.
Propose a suitable alternative market entry strategy in recommendations
As in line with the view of Rooyen W. V. (2020), Global joint project is an alternative
market technique for a miles fast and lots masses a good deal much less highly-priced approach
to global marketplace than may be attained thru using approach of buying an contemporary
industrial enterprise business enterprise within the management or start a current-day employer.
IJVs deliver rapid technique to channels of allocation, and that they offer permission for the non-
neighborhood companion to competencies ability and apprehend-approximately the close by
marketplace, that considerably will increase the opportunity for corporations fulfillment
(Cacciolatti and et. Al., 2020). The native collaborator moreover often has present connections
with major carriers and clients, and abilities within the native speech and duties. These benefits
can be often deprecatory to a micro or mini-sized employer which does no longer have the cash,
belongings or capability obligatory to are trying to find the risk until it can percentage the dearth
5

of self perception and the rate with the resource of way of way of an association which includes
an remote places joint undertaking. IJVs authorise the collaboration to transport rapidly, fee
efficiently and with credibility in the domestic market. The events to an IJV also can draw close
advantages of harmonising lines of enterprise and synergies which can also exist the various
institutions.
ANALYIS AND DISCUSSION
The worldwide business employer environment is multidimensional thinking about the
political risks, cultural versions, and alternate threat, prison and taxation troubles. Basically those
all additives and elements may be taken into consideration due to the reality the factors of
PESTEL assessment. These elements create a super effect on the monetary business corporation
company sports sports worldwide business enterprise commercial enterprise agency like
Establishment. Political surroundings indicates to the shape of the government, the authorities’
relation with a business organisation business enterprise and the political hazard within the
country (Subramanian, Bo and Kah-Hin, 2018). In UK, because of everyday monetary instability
in the globe, the national authority encourages shops to create jobs for home population. The
respective venture performs its position in generating employment options, it furthermore, in
turn, maximises the selection for its commodities and diversifies its personnel. Along with this,
financial aspect furthermore have an effect on the organisation which encompass because of
Brexit inflation get up as well as current COVID 19 crisis furthermore have an impact at the
enterprise monetary machine (Klus and et. Al., 2019). Likewise, social element have an effect on
in term of cultural versions because of the reality the corporation feature its commercial
enterprise agency international degree so there are amount of people make their contribution in
taking walks the project of business enterprise and they belong form specific cultures and areas.
It has concurrently maximised the possible duration an properly certainly truly really worth of
modern-day most important worldwide exchange at the same time as additionally make easy the
emergence of a whole new technology of cutting-edge companies. It moreover may be analysed
that during time period of purchasing and promoting in to amazing international locations in
addition to global business enterprise surroundings, the agencies need to endure in thoughts joint
project strategy that is crucial to a company in moving into in to a present day company
environment and make expansion in its industrial enterprise.
6

There numerous strategies and strategies which can be taken into consideration thru the use
of the global agency undertaking in time period of handling and mitigating dangers which can be
faced with the aid of it inside the path of strolling industrial agency thru joint assignment choice.
Hire expert nearby information, growth a industrial corporation model for unique marketplace
and have contingency plans are some approach which may be used and implemented via the
global business enterprise like Establishment. By hiring neighbourhood knowledgeable person,
the employer can execute its business sports activities sports and operation in a extraordinary
deal plenty much less complex way. Because they may familiar with the attempting to find
energy of clients and without troubles provide them commodities as constant with their
requirements (Vendrell-Herrero and et. Al., 2018). This will help in handling the hazard of loads
lots much less patron base and coffee income. Additionally, with the useful resource of
developing a business version for specific market, the business enterprise can perform the
monetary employer in systematic manner and provide a shape to personnel for on foot simply so
the danger of ineffectiveness of business business enterprise may be reduced and controlled.
Along with this, having contingency plan furthermore useful aid the industrial organisation in the
scenario of damage and chance. With this, employer can hold well in global enterprise
organisation surroundings.
There are numerous conceptions and theoretical frameworks are taken into consideration
with the aid of the manager of world assignment which allows in handling the place of work
opinions, systematic enterprise agency operation and inspire the employees in addition to have a
study that how superb to growth operational strategies. Classical control precept, behavioural
principle and plenty of extra necessities are important for the powerful management of place of
business. Classical control framework is the oldest management idea which concentrates on
operations and the advent of requirements to maximise production output. The administrator of
respective business corporation can hold in thoughts this concept if you want to boom output and
remunerating immoderate acting people with the useful resource of way of wages on bonuses.
Also, behavioural precept can be observed thru international organization on the way to upward
thrust to more human interests in the operating environment. Management theories started out to
hold in mind extra humans orientated strategies (Li and Reuer, 2021). Human demeanour and
appealing the interpersonal dreams of humans have emerge as greater valuable to govern. The
7

supervisor of global company, education behavioural management idea would possibly inspire
organization work through way of fostering a collaborative environment.
In order to be a success in the worldwide markets in the air shipping location, it is
important to facilitate the desires of the clients and make bigger the variety of offerings.
Providing passengers with the opportunity to gain the locations wherein they need at any time is
a hard venture for a commercial business enterprise organisation that calls for rate-effective,
hardware-massive investments. Overcoming those demanding situations was feasible by using
lowering charges, imparting patron wishes solely building strategic alliances. The objectives
of Strategic alliances among airlines are coming into new markets, sharing information
technologies, reducing prices, reducing risk and opposition. Airline alliances lessen the switch
and ready times of the passengers journeying, make bigger the range with the aid of offering
greater flight alternatives, provide numerous prizes for frequent flying passengers, and offer
advantages such as cut price and reserving priority. Thanks to the strategic alliances’
practices, the corporation gives advantages such as great service, shared education for the
personnel, commonplace use of renovation and restore factors, and simplicity of change in
spare components.Increasing demands on the airline sector results in the boom of the airline
marketplace and the formation of harsh opposition conditions. These competition conditions
encourage airline businesses to come to be companions and boom the satisfactory of offerings.
Competition conditions also lessen price tag prices.
CONCLUSION
It has been analysed form the described facts that worldwide commercial agency is an hobby
and method of on foot and jogging similarly to appearing the corporation movement of a
organisation in global agency environment in order that it may make development in its
profitability margin, consumer base, income and productivity as nicely. By considering strategic
alliance marketplace get admission to approach, the agency can make bigger in more superior
manner further to loads much less risk and risk. At worldwide scale, industrial enterprise is
usually recommended through using numerous outdoor commercial enterprise corporation
environmental additives in numerous techniques. If a challenge operates through International
strategic alliance then it is able to set up a powerful function and brand photo especially
company employer.
8

REFERENCES
Books & Journals
Li, C. and Reuer, J.J., 2021. The impact of corruption on market reactions to international
strategic alliances. Journal of International Business Studies, pp.1-16.
Aggarwal, V. and Kapoor, M., 2018. Innovation growth from knowledge transfer in international
strategic alliances. Journal of Strategy and Management.
Robson, M.J. and et. al., 2019. Alliance capabilities, interpartner attributes, and performance
outcomes in international strategic alliances. Journal of World Business, 54(2), pp.137-153.
Ho, M.H.W., Ghauri, P.N. and Kafouros, M., 2019. Knowledge acquisition in international
strategic alliances: The role of knowledge ambiguity. Management International Review, 59(3),
pp.439-463.
Shijaku, E., Larraza-Kintana, M. and Urtasun-Alonso, A., 2020. Network centrality and
organizational aspirations: A behavioral interaction in the context of international strategic
alliances. Journal of International Business Studies, 51(5), pp.813-828.
Bamel, N. and et. al., 2021. Knowledge management within a strategic alliances context: past,
present and future. Journal of Knowledge Management.
Mamédio, D., Rocha, C., Szczepanik, D. and Kato, H., 2019. Strategic alliances and dynamic
capabilities: A systematic review. Journal of Strategy and Management.
Ferreira, A. and Franco, M., 2019. The influence of strategic alliances on human capital
development: A study applied to technology-based SMEs. EuroMed Journal of Business.
Cacciolatti, L. and et. al., 2020. Strategic alliances and firm performance in startups with a social
mission. Journal of Business Research, 106, pp.106-117.
Subramanian, A.M., Bo, W. and Kah-Hin, C., 2018. The role of knowledge base homogeneity in
learning from strategic alliances. Research policy, 47(1), pp.158-168.
Klus, M.F. and et. al., 2019. Strategic alliances between banks and fintechs for digital
innovation: Motives to collaborate and types of interaction. The Journal of Entrepreneurial
Finance, 21(1), p.1.
Vendrell-Herrero, F. and et. al., 2018. Uncovering the role of cross-border strategic alliances and
expertise decision centralization in enhancing product-service innovation in
MMNEs. International Business Review, 27(4), pp.814-825.
Online
9

Kenton W. 2021. Strategic Alliance. [Online]. Available Through:
https://www.investopedia.com/terms/s/strategicalliance.asp>.
Kalia V. 2021. Strategic Alliance: What is it, Types, Benefits & Why You Need it. [Online].
Available Through: <https://www.workspan.com/blog/strategic-alliance-definition/>.
MOTIVATIONS FOR ENTERING INTO A STRATEGIC ALLIANCE. 2021. [Online]. Available
Through: < https://ebrary.net/3860/management/motivations_entering_strategic_alliance>.
Gaille B. 2018. Global Strategic Alliances Advantages and Disadvantages. 2021. [Online].
Available Through: < https://brandongaille.com/15-global-strategic-alliances-advantages-and-
disadvantages/>.
Boon T. 2020. The 3 Major Airline Alliances: Star Alliance, oneworld and SkyTeam – Why Are
They Good?. [Online]. Available Through: < https://simpleflying.com/the-3-major-airline-
alliances-star-allince-oneworld-and-skyteam-why-are-they-good/>.
Partnerships between airlines: the strategy to win the Asian market. 2021. [Online]. Available
Through: < https://www.sia-partners.com/en/news-and-publications/from-our-experts/
partnerships-between-airlines-strategy-win-asian-market>.
SkyTeam plans new partnership platform to attract hybrids and LCCs, especially in Brazil and
India. 2021. [Online]. Available Through: <
https://centreforaviation.com/analysis/reports/skyteam-plans-new-partnership-platform-to-
attract-hybrids-and-lccs-especially-in-brazil-and-india-83461>.
10