©2004 prentice hall13-1 chapter 13: international strategic alliances international business, 4 th...
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©2004 Prentice Hall13-1
Chapter 13:International Strategic Alliances
International Business, 4th Edition
Griffin & Pustay
©2004 Prentice Hall13-2
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 alliance
Identify the limitations of strategic alliances
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Lukoil is building a tanker fleet to haul oil to Asian and American refineries
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Figure 13.1 Benefits of Strategic Alliances
Potential Benefitsof Strategic Alliances
Ease ofMarketEntry
SharedRisk
Shared Knowledge
andExpertise
Synergyand
CompetitiveAdvantage
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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 Alliances
Comprehensive Functional
– Production
– Marketing
– Financial
– Research and Development
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Comprehensive Alliances
Participating firms agree to perform together multiple stages of the process by which goods or services are brought to the market
Functional areas are intertwined between firms
Organized as joint ventures Achieves greater synergy through sheer size
and total resources
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Functional Alliances
Involve only a single functional area of the business
Integration is less complex Does not typically take the form of a
joint venture
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Implementation of Strategic Alliances
Selection of partners Compatibility Nature of potential partner’s products
or services Relative safeness of the alliance Learning potential of the alliance
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Asahi Video Products Company: A Joint Venture between Corning and Asahi Glass
Asahi Glass’s expertise in large television bulb technology complemented Corning’s strength in other bulb sizes
Joint venture would benefit from Asahi Glass’s ongoing business connections
Combined strength of the two firms would help both stay abreast of technological innovations
©2004 Prentice Hall13-14
Asahi Video Products Company: A Joint Venture between Corning and Asahi Glass
Asahi Glass would benefit from Corning’s technology and marketing clout in U.S.
Corning had successfully operated another joint venture with Asahi Glass
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Form of Ownership
Corporation Limited partnership Public-private venture
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Joint Management Considerations
Shared management agreements Assigned arrangements Delegated arrangements
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Shared Management Agreement (Figure 13.3)
Partner 1 Partner 2
Alliance
Both partnersparticipate actively
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Assigned Arrangement (Figure 13.3)
Partner 1 Partner 2
Alliance
One partner takesprimary responsibility
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Delegated Arrangement (Figure 13.3)
Partner 1 Partner 2
Joint Venture
Both partners delegatemanagement to the
joint venture’sexecutives
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Figure 13.4 Pitfalls of Strategic Alliances
Pitfallsof Strategic Alliances
Incompatibilityof
partners
Access to
Information
Distributionof
Earnings
Loss of
Autonomy
ChangingCircum-stances
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Beijing Jeep – A joint venture between American Motors Company (part of Daimler Chrysler) and Beijing Auto Works