Essay Title: 

Strategic Alliances as Response to the Challenges of Globalization

March 24, 2016 | Author: | Posted in other

Strategic Alliances as Response to the Challenges of Globalization

People have cooperated since the time that evolution enabled them to take decisions and actions . Thus , it is not surprising that strategic alliances are an increasingly popular strategy [now -] in an era characterized by blurring industry boundaries , fast-changing technologies , and global integration (Das Teng 2003 ,

. 279 . The process of intense economic and industrial change since 1970s showed the growth of the venture capital funded entrepreneurial firms with substantial outsourcing of non-key processes , leading previously internalised value-chain activities to be returned [banner_entry_middle]

to the market place This led to the disadvantage of fragmentation of companies and developing resource limitations , particularly in the face of the increasing globalization of markets (Hertz 1996 ,

. 108 . In response there has been a dramatic growth of strategic alliances between firms since the late 1980s . Coalitions became a valuable tool in many aspects of global strategy , and the ability to exploit them is found nowadays an important source of international advantage helping to cope with the uncertainties of new highly complex business environments (Daboub 2002 br

. 43 . This trend has led to changes in the organisational composition of international trade . Now for advanced economies , such as the U .S the EU , and Japan , often about one-half of the trade crossing their bs consists of internal transfers within the same enterprise . More than half of Digital Equipment ‘s revenues come from overseas operations One-third of General Electric ‘s profits are derived from its international activities (Millington Bayliss 1995 ,

. 242 HYPERLINK “http /www .questia .com /PM .qst ?a o d ” Besides companies in the developed countries often exploit their markets to an almost full extent so that there is no longer any room for growth . Under such pressure , they look for opportunities in international markets Economists believe that strategic alliances will be increasingly important further with the development of new industries and the revitalisation of mature ones (Brown 1996 ,

. 62

Fundamental changes are occurring in the very nature of the private business enterprise as it responds to the threats and opportunities of the global marketplace . Even the firms most oriented to domestic business increase their geographic reach as their suppliers and customers are more frequently located on a variety of continents . The further advance of technology continues to reduce the importance of national bs (Hertz 1996 ,

. 106 . These trends conditioned popularity of strategic alliances as the form of cooperation meeting the challenges of globalization in a very effective way

The purpose of this study is to scrutinise global strategic partnerships from economic , organisational , and strategic perspectives , as well as to discuss the dynamics and benefits of strategic alliances by examining the present trends and characteristics of intercompany cooperation and by analysing the motives and processes of such enterprises such as partner selection . As a result of theoretical and practical research and analyses , we will make a conclusion as to the causes of the success or failure of strategic business alliances and the underlying factors influencing… [banner_entry_footer]

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