international strategic
alliances
international business, 5th edition
chapter 13
Chapter Objectives 1
• Compare joint ventures and other
forms of strategic alliances
• Characterize the benefits of
strategic alliances
• Describe the scope of strategic
alliances
13-2
Chapter Objectives 2
• Discuss the forms of management
used for strategic alliances
• Identify the limitations of strategic
alliances
13-3
Strategic Alliances
A strategic alliance is a business
arrangement whereby two or more
firms choose to cooperate for their
mutual benefit.
13-4
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
Figure 13.1 Benefits of
Strategic Alliances
Potential Benefits
of Strategic Alliances
Ease of
Market
Entry
13-6
Shared
Risk
Shared
Synergy
Knowledge
and
and
Competitive
Expertise
Advantage
Map 13.1 Namibia
and Joint Ventures
13-7
Scope of Strategic Alliances
• Significant variation
– Comprehensive alliance
– Narrowly defined alliance
• Degree of collaboration depends
upon basic goals of each partner
13-8
Figure 13.2 The Scope of
Strategic Alliances
13-9
Types of
Functional Alliances
Production alliances
Marketing alliances
Financial alliances
R&D alliances
13-10
Issues in the Implementation of
Strategic Alliances
Partner
selection
Form of
ownership
13-11
Joint
management
Factors Affecting
Partner Selection
13-12
Compatibility
Nature of
partner services
Relative safeness
Learning potential
Approaches to
Joint Management
Shared
management
agreements
Assigned
arrangements
Delegated
arrangements
13-13
Figure 13.3a Shared
Management Agreement
Partner
1
Partner
2
Both parties are active
participants
Alliance
13-14
Figure 13.3b Assigned
Arrangement
Partner
1
Partner
2
One partner takes primary
responsibility
Alliance
13-15
Figure 13.3c Delegated
Arrangement
Partner
1
Partner
2
Joint venture
13-16
Figure 13.4 Pitfalls of
Strategic Alliances
Changing
circumstances
Incompatibility
of partners
Pitfalls
Loss of
autonomy
Access to
information
Distribution
of earnings
13-17