Chapter8InternationalStrategicAlliances“Thebusyschedulesoftheincreasingnumberofdual-careerfamilieshavealsospurreddemandforprepackagedfoods.”TheEuropeanCerealWarsGlobalizationcanbeaveryexpensiveprocess,particularlywhenafirmmustperfectlycoordinateR&D,production,distribution,marketing,andfinancialdecisionsthroughouttheworldinordertosucceed.InternationalCorporateCooperationSuchformsofcooperationareknowncollectivelyasstrategicalliances,businessarrangementswherebytwoormorefirmschoosetocooperatefortheirmutualbenefit.Ajointventureisaspecialtypeofstrategicallianceinwhichtwoormorefirmsjointogethertocreateanewbusinessentitythatislegallyseparateanddistinct.BenefitsofStrategicAlliancesAssummarizedinFigure8.1,internationalbusinessmayrealizefourbenefitsfromstrategicalliancesasfollows:EmergingOpportunitiesTheUpsandDownsofMarketEntryScopeofStrategicAlliancesThescopeofcooperationamongfirmsmayvarysignificantly,asFigure8.2illustrates.SeaLaunch:AMatchMadeintheHeavensComprehensiveAlliancesarisewhentheparticipatingfirmsagreetoperformtogethermultiplestagesoftheprocessbywhichgoodsorservicesarebroughttothemarket:R&D,design,production,marketing,anddistribution.Moreover,byfullyintegratingtheirefforts,participatingfirmsinacomprehensiveallianceareabletoachievegreatersynergythroughsheersizeandtotalresources.FunctionalAlliancesAProductionAllianceisafunctionalallianceinwhichtwoormorefirmseachmanufactureproductsorprovideserviceinasharedorcommonfacility.Amarketingallianceisafunctionalallianceinwhichtwoormorefirmssharemarketingservicesorexpertise.ThistimewewillseethealliancesintheskyAFinancialAllianceisafunctionalallianceoffirmsthatwanttoreducetheriskassociatedwithaproject.InanR&Dalliance,thepartnersagreetoundertakejointresearchtodevelopnewproductsorservices.AnR&Dconsortiumisaconfederationoforganizationsthatbandtogethertoresearchanddevelopnewproductsandprocessesforworldmarkets.ImplementationofStrategicAlliancesSelectionofPartnersThesuccessofanycooperativeundertakingdependsonchoosingtheappropriatepartners.Researchsuggeststhatstrategicalliancesaremorelikelytobesuccessfuliftheskillsandresourcesofthepartnersarecomplementary-eachmustbringtothealliancesomeorganizationalstrengththeotherlacks.Afirmcontemplatingastrategicallianceshouldconsideratleastfourfactorsinselectingapartner:⑴compatibility,⑵thenatureofthepotentialpartner’sproductsorservices,⑶therelativesafenessofthealliance,and⑷thelearningpotentialofthealliance.Corningbelievedthisventurewouldbeasoundoneforseveralreasons:■AsahiGlass’sexpertiseinlargetelevisionbulbtechnologycomplementedCorning’sstrengthinotherbulbsizes.■ThejointventurewouldbenefitfromAsahiGlass’songoingbusinessconnectionswiththeincreasingnumberofJapanesetelevisionmanufacturersthatwereestablishingNorthAmericanfacilities.■Thecombinedstrengthsofthetwofirmswouldhelpbothkeepabreastoftechnologicalinnovationsinthevideodisplayindustry.■AsahiGlasswouldbenefitfromCorning’stechnologyandmarketingcloutintheU.S.market.■CorninghadsuccessfullyoperatedanotherjointventurewithAsahiGlasssince1965.TheLearningPotentialoftheAllianceFormsofOwnershipAspecialformofjointventure,apublic-privateventure,isonethatinvolvesapartnershipbetweenaprivatelyownedfirmandagovernment.JointManagementConsiderationsUnderasharedmanagementagreement,eachpartnerfullyandactivelyparticipatesinmanagingthealliance.Underaassignedarrangement,onepartnerassumesprimaryresponsibilityfortheoperationsofthestrategicalliance.Underadelegatedarrangement,whichisreservedforjointventures,thepartnersagreenottogetinvolvedinongoingoperationsandsodelegatemanagementcontroltotheexecutivesofthejointventureitself.