international business, 5th edition

chapter 13
international strategic
alliances
 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 alliances
• Identify the limitations of strategic
alliances

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 Strategic Alliances

A strategic alliance is a business

arrangement whereby two or more
firms choose to cooperate for their
mutual benefit.

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 Joint Venture

A joint venture (JV) is a special type

of strategic alliance in which two or
more firms join together to create a
new business entity that is legally
separate and distinct from its parents.

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 Figure 13.1 Benefits of
Strategic Alliances

Potential Benefits
of Strategic Alliances

Shared Synergy
Ease of
Shared Knowledge and
Market
Risk and Competitive
Entry
Expertise Advantage

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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
Functional Alliances

Production alliances

Marketing alliances

Financial alliances

R&D alliances

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 Issues in the Implementation of
Strategic Alliances

Partner
selection

Form of Joint
ownership management

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 Factors Affecting
Partner Selection

Nature of
Compatibility
partner services

Relative safeness Learning potential

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 Approaches to
Joint Management

Shared
management
agreements

Assigned
arrangements

Delegated
arrangements

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 Figure 13.3a Shared
Management Agreement

Partner Partner
1 2

Both parties are active

participants

Alliance

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 Figure 13.3b Assigned
Arrangement

Partner Partner
1 2

One partner takes primary

responsibility

Alliance

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 Figure 13.3c Delegated
Arrangement

Partner Partner
1 2

Joint venture

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 Figure 13.4 Pitfalls of
Strategic Alliances

Changing Incompatibility
circumstances of partners

Pitfalls
Loss of
Access to
autonomy
information
Distribution
of earnings

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