CPL today announced the launch of its joint venture with the US based vaccine company, Novavax as per the agreement signed between the two companies in March Our vision is to be a leading provider of high quality, affordable vaccines, biological therapeutics and diagnostics through world-class research and innovative manufacturing to address current and future global health challenges. This technology significantly compresses vaccine manufacturing time as compared to the conventional methods.
Firms may combine their efforts for a variety of purposes including, but not limited to, sharing knowledge, expertise, and expenses as well as to gain entry to new markets or to gain a competitive advantage in one. Further, creation of a strategic alliance may turn actual or potential competitors into partners working toward a common goal.
Use of strategic alliances has become a major tool for businesses that are internationalizing their operations. Therefore, use of strategic alliances has expanded dramatically over the past decade, and their use will continue to increase as we enter the 21st century.
This article provides an introduction to strategic alliances. First, characteristics of a strategic alliance are examined and examples are given. Second, the benefits of strategic alliances are discussed, and, third, choices involved in formation of a strategic alliance are explored.
Finally, the special considerations for international strategic alliances are discussed. Astrategic alliance is often, but not always, in the form of a joint venture. A joint venture is created when two or more firms work together to form a new business entity that is separate from its "parents.
Ownership may be in equal or unequal shares, and may provide for changes in ownership of shares. The most common kind is the joint venture through a subsidiary.
In such an instance, two entities create a third separate entity with its own legal existence. For example, American Motors Corp. Another is Advantages of strategic alliances and joint joint venture by acquisition.
It is created when one business purchases all or part of the shares of another. For example, in the s, the Lear Corp. A third is the joint venture by merger. This is created when two or more companies are dissolved and incorporated into one surviving entity.
For example, corporations A and B merge and their assets are conveyed to a newly created corporation C. After the merger, corporation C continues but corporations A and B are dissolved.
It should be noted, however, that this legal mechanism is seldom used for international joint ventures. In general, a strategic alliance that is not in the form of a joint venture is formed for a limited purpose and is more narrow in its operations than the joint venture. Non-joint venture strategic alliances tend to be less stable and last for shorter terms than joint ventures.
For example, United Airlines and British Airlines formed a strategic alliance for the purpose of marketing their North American and European routes in They did so because they were losing part of their market share to Delta and American Airlines. Within a year, however, the market shifted and they terminated the agreement.
It is important to note that not all linkages between national or international businesses are strategic alliances. Examples of arrangements that do not create strategic alliances include licensing, exporting, franchising, and foreign direct investment agreements. BENEFITS The Internet, advances in telecommunications, and improved transportation systems have helped firms enter foreign markets and have contributed to the globalization of business.
Simultaneously, they have facilitated the creation of strategic alliances. The decision to form a strategic alliance depends on the needs and goals of the companies involved and on the laws of the countries in which the companies are doing business. It should be noted, however, that discussion of the specific laws of various countries is beyond the scope of this article.
The auto industry is an example of an industry that relies heavily on strategic alliances. In the s the auto industry began to rely heavily on joint venture strategic alliances as it expanded its operations in Mexico and Latin America. Auto makers began to demand more complete systems from their suppliers in Mexico, and engineering responsibility was transferred from the auto makers to their suppliers.
They are encouraging Tier I suppliers to enter joint ventures with other companies. And, in general, the Tier I suppliers have the authority to select their own suppliers and joint ventures partners except in areas such as safety and regulatory matters where control is crucial. A strategic alliance can ease entry into a foreign market.
First, the local firm can provide knowledge of markets, customer preferences, distribution networks, and suppliers. This is especially true in Eastern Europe. Bestfoods is a food-processing firm that sells products such as Mazola corn oil. Bestfoods has formed strategic alliances with firms in several Eastern European countries that, in turn, market its products.
A strategic alliance between British Airways and American Airlines was created in and designed to give the two airlines increased access to North American and European markets, respectively.
Sometimes, foreign countries require that a certain percentage of ownership remain in the hands of its citizens.Making Good Strategic Decisions. Para mis visitantes del mundo de habla hispana, este sitio se encuentra disponible en español en: Versión en Español Sitio Espejo para América Latina.
Decision-Making is central to human activity. Advantages & Disadvantage of a Joint Venture. A joint venture is a strategic alliance between two or more individuals or entities to engage in a specific project or undertaking.
What are the Advantages of forming a Joint Venture? The competitive advantage of strategic alliances Natalia Cojohari, doctorand ASE Bucuresti, asistent univ. Universitatea “Alecu Russo”, Bălţi In today's environment, creating sustainable value for .
Characterization of strategic information systems. Indice 1. Overview 2. General Definition 3. Porter’s Competitive Advantage 4. Wiseman’s Strategic Perspective View. A strategic alliance (also see strategic partnership) Unlike in a joint venture, firms in a strategic alliance do not form a new entity to further their aims but collaborate while remaining apart and distinct.
Further advantages of strategic alliances. Access to new technology, intellectual property rights.
Joint working between track and train companies will take different forms tailored to each area, including new joint operational teams, short-term task forces to manage improvement, or longer.