|Type of paper:
|Export International business
In times of globalization, managers are often confronted with various competitive landscapes that keep on changing. In overcoming this kind of difficulty, firms tend to make alliances. Apparently, forming a meaningful and strategic alliance is certainly the most relevant choices for managers in searching for ways on how to compete effectively while still creating a successful future. The global alliance is no different from this aspect and in a related way, companies have to face similar challenges. In recent times it has become fashionable for companies to form collaborations. It is, therefore, no doubt that a strategic alliance is a formative and corporative agreement between different firms. This corporation brings together both big as well as small organizations where partner companies combine efforts towards achieving a common goal.
STEPS THAT EXPORTERS SHOULD TAKE TO ENSURE SUCCESS WHEN FORMING AN ALLIANCE
Develop a Strategy
While many exporters focus their energy on the kind of partner to make an alliance with, it is always advisable to come up with a well-defined and achievable strategy. One has to start with a relevant strategy and not a partner (Jakada, 2014). Additionally, a company has to ensure there is clarity surrounding the capabilities of the strategy, tradeoffs as well as strategic priorities.
Invest In Joint Upfront Planning
A successful alliance formation is always guided by time invested in planning collaborative plans with a set of partners. One has to understand the type of partner the trade involved in the previous experiences, operational perspectives as well as their cultures (Jakada, 2014). This will solve any cultural conflict that can be faced during the alliance.
Plan the End
Primarily, alliances are always finite with an average duration of at least one year. One has to consider various circumstances that might lead to the collapse of the alliance as well as agreeing on the action that will be taken upon a shared asset (Jia, Sun, & Koh, 2016).
Create a Necessary Trust
Just like any relationship, trust is critical to any partners in a set of the alliance. One has to create a mindset that will enable all the participant benefit mutually in the alliance (Jakada, 2014). It is therefore important to make commitments in furthering the alliance and honoring them.
A successful alliance has to start with as small yet achievable and shared objectives. Building an early momentum is crucial in increasing buy-in to a set of the alliance as well as the ongoing changes during the process.
Despite any underlying historic differences between members in a given alliance, every individual is expected to behave consistently (Jakada, 2014). This will depend on the clarity of the established objectives used to align a given organization as well as tracking its progress.
ISSUES THAT MIGHT ARISE WHEN FORMING AN ALLIANCE
Primarily, implementation of an alliance in a particular emerging market can result in rather complex issues across the globe. Apparently, such a market is likely to present various challenges including cultural, regulatory as well as economic difficulties that have to be anticipated in early stages of the process (Ghasham, Nik, & Ghani, 2016). Essentially, participants in a particular alliance are required to practice a more considerable judgment and, therefore, this may result in difficult trade-offs to enable navigation of the conflicting perspectives in regard to major internal stakeholders.
BENEFITS OF A GLOBAL ALLIANCE
With the rising level of globalization, alliances are likely to help firms to create a meaningful way of expanding as well as globalizing without subjecting a company to risks likely to be found in unfamiliar markets.
In case it is done in the right manner, alliances can result to outperformance as well as a competitive advantage (Jakada, 2014). According to recent researchers, stock prices of a selected global alliance rose to about 1 percent which is equivalent to $54m per alliance(Jia, Sun, & Koh, 2016).
A global alliance also allows a firm to exploit a rather new opportunity thus strengthening its position in a market where there is an existence of foothold (Jia, Sun, & Koh, 2016).
A firm which participates in an alliance is likely to develop new products since it is exposed to new skills as well as technology (Jakada, 2014).
It is evident that a global alliance is taking shape in the contemporary world market involving different firms. Therefore, there is a chance that longer-term practitioners will tend to implement alliance to take the place of traditional trading methods. For a proper alliance, an exporter has to take steps such as, developing a strategy, investing in a joint upfront planning, considering plan end, creating a necessary trust, considering an end, starting small, and keeping track. Additionally, some of the benefits of alliances are developing new products, exploitation of a new market, enjoying a competitive advantage, and creation of meaningful expansion.
Ghasham, A. A. N., Nik, N. A. H., & Ghani, N. H. A. (2016). The Impact of Global Market Environment on the Degree of Cooperation of International Strategic Alliances among Service Firms. International Review of Management and Marketing, 6(2).
Jakada, B. A. (2014). Building global strategic alliances and coalitions for foreign investment opportunities. International Journal of Global Business, 7(1), 77.
Jia, F., Sun, H., & Koh, L. (2016). Global solar photovoltaic industry: an overview and National Competitiveness of Taiwan. Journal of Cleaner Production, 126, 550-562.
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