Strategic Alliances

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In the world today, many companies have resorted to competitive collaboration to create and appropriate value to their businesses. This is backed by Bartlett’s & Beamish’s statement which states “as many MNEs have shifted their focus away from preemptive competition to a simultaneous reliance on both collaboration and competition, they have also shifted their focus to one of both value creation and value appropriation, thereby leveraging their own competitiveness and innovative capabilities.” The essay is going to use the ideas given by these two articles, “the Design and Management of international joint ventures” and “collaborate with your competitor-and win.” to discuss the statement.

Joint ventures are usually companies that are co-owned by two nationally different firms. They help partner pool resources and jointly coordinate their efforts so as to achieve results that they could not manage on their own. The reasons why joint ventures are formed, these are; for firms to strengthen their existing businesses, to take their products into new markets, to bring new products into their existing markets, and to expand into new businesses. These in themselves agree with the statement. The article has gone ahead to back this with companies that have applied these reasons and realized big gains that they wouldn’t have on their own. They do this keeping in mind that they are still competitors; therefore, they cautiously enter into ventures with clear definitions of what they want from them. They make sure that there is equity in the alliance that is to mean that every one should be satisfied (Beamish, n.d.)

Strategic alliances strengthen both the partners against the others. Although, cases have been there where, one partner emerges stronger than the other. For example alliances between Western companies and Asian counter parts have seen Asian companies emerging from the alliances stronger than their Western partners. The article also agrees that companies use competitive collaborations to better their skills and technologies internally, but at the same time guarding their competitive advantage from their ambitious partners. In these two articles it is clear that whether it is joint ventures or collaboration, they are all but other forms of competition and therefore occasional misunderstandings are bound to occur. They must therefore guard against competitive compromise. They also agree that learning from partners is something that can not be ignored. That distrust among the partners can spoil the partnership threatening its survival. That, for collaborations to last, each party must make a distinctive contribution to the partnership. The proximity that one gets in competitive collaborations makes benchmarking easier. Both articles warn parties in both joint ventures and competitive collaborations to proceed with care (Hamel, doz and Prahald 1989).

Conclusion

In the first article we have seen that many firms have picked on international joint ventures as their strategies. It has emerged that they can not be completely avoided even if some companies do not meet their management expectations. They will only work in favor of those companies that will learn how manage them quickly not those who give up when they taste difficulty. Shortened product life cycles have made difficult for firms to go it alone. This coupled with the high number of MNEs coming up from emerging markets, will raise the supply and demand for partnerships. We also see that running away from collaborations is not an option for companies even those who think are big can not beat their rivals alone.

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Bartlett and Beamish Today’s Business Environment
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