International business 6e griffin chapter 13

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

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Chapter Objectives 2
• Discuss the forms of management
used for strategic alliances
• Identify the limitations of strategic
alliances

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Strategic Alliances
A strategic alliance is a business
arrangement whereby two or more

firms choose to cooperate for their
mutual benefit.

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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.

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Figure 13.1 Benefits of
Strategic Alliances
Potential Benefits
of Strategic Alliances

Ease of
Market
Entry

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Shared
Risk

Shared
Synergy
Knowledge
and
and
Competitive
Expertise
Advantage


Map 13.1 Namibia
and Joint Ventures

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Scope of Strategic Alliances
• Significant variation
– Comprehensive alliance
– Narrowly defined alliance

• Degree of collaboration depends
upon basic goals of each partner

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Figure 13.2 The Scope of
Strategic Alliances

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Types of
Functional Alliances
Production alliances
Marketing alliances
Financial alliances
R&D alliances

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Issues in the Implementation of
Strategic Alliances

Partner
selection
Form of
ownership

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Joint
management


Factors Affecting
Partner Selection

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Compatibility

Nature of
partner services

Relative safeness

Learning potential


Approaches to
Joint Management
Shared
management
agreements
Assigned
arrangements
Delegated
arrangements
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Figure 13.3a Shared
Management Agreement

Partner
1

Partner
2

Both parties are active
participants

Alliance
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Figure 13.3b Assigned
Arrangement

Partner
1

Partner
2

One partner takes primary
responsibility

Alliance
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Figure 13.3c Delegated
Arrangement

Partner

1

Partner
2

Joint venture
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Figure 13.4 Pitfalls of
Strategic Alliances
Changing
circumstances

Incompatibility
of partners

Pitfalls
Loss of
autonomy

Access to
information
Distribution
of earnings

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