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Business Studies Notes 3
rd.
Year
Undergraduate / Graduate Level
SUBJECT: Strategic
Alliance.
Authors: (Original Study Notes and Lecture Notes prepared by Mr. K.P. Saluja (M.B.A. from Indian Institute of Management Ahmedabad), and by Mr. K. K. Prasad (M.B.A from IGNOU Delhi) These notes are intended to be used by undergraduate students, completing Year 3 Business Degree Courses. These notes will help undergraduates and graduates complete case studies, coursework assignments and pass exams in Business Studies and Economics.
TABLE OF CONTENTS
(1) Strategic Alliance definition (2) Benefits of strategic alliances (3) Types of strategic alliances (4) How to start a strategic alliance (5) Disadvantages of a Strategic Alliance (6) Corporate Culture definition (7) Importance of Corporate Culture (8) Elements of Corporate Culture (9) Types of Corporate Culture
Strategic Alliance definition
A strategic alliance is an understanding between two organizations. Organizations participate in an essential union to get a shared advantage that helps both of their organizations. This might be a less perplexing game plan on the off chance that they're in a non-binding agreement. Although a few organizations might need to have an official consent to underline the legitimate agreements of their business relationship.
Benefits of strategic alliances
your organization with media coordination and ticket deals for exhibitions at scenes in New York City. Attain different sources of income Working with a strategic alliance aids you in further developing the assets you need to scale your organization and renew the administrations you give to your accomplice. For instance, the organization in your essential union could give visual depiction administrations while your organization spends significant time in copywriting administrations. In the event that you cooperate on a client, you might divide the benefits with your accomplice in light of the consequences of the client's mission. Regardless of the benefits procured from working with your accomplice, your organization actually makes a pay from the instalment of different clients who bought administrations from your organization. Limit risk Proceeding with a strategic alliance limits risk for your company because of the high-quality service delivered while working with another company. If companies join a strategic alliance and specialize in two areas of business, like marketing and public relations, they can create a final product that makes a positive impact on their target audience. The mutual return they get allows them to focus on how to grow their companies and the impact of their brands. Obtain new resources Working in a strategic alliance licenses you to make an arrangement to prepare and give assets to develop your employees. The manner in which you train your group assists them with speaking with key individuals from your partner's company, alongside featuring the obligations of employees and best practices for them to finish great work. The more instruments and assets you provide for your employees, the better opportunity they need to keep your accomplice cheerful and keep up with the outcome of the coalition.
Change public perception Announcing a strategic alliance might help your organization's standing, particularly on the off chance that you're a more modest organization. For instance, a little designing organization could work with an enormous organization that forms parts for business and military airplane and has a decent standing. Entering the union can give your organization more name- recognition, which might prompt your organization getting more leads and clients. Possibilities might accept that your organization is doing great since it procured the consideration of a generally perceived organization in their industry.
Types of strategic alliances
The type of strategic alliance you pick concludes the degree of the relationship you have with another organization. Here are the three kinds of strategic alliances: Joint venture: A joint venture is a binding agreement where two parent companies create a new child company or a subsidiary. The two parent companies share equity and resources during the agreement. Profits mainly get split between the two companies, and they each have a distinct objective that drives their inspiration for proceeding with a joint venture. Equity strategic alliance: An equity strategic alliance occurs when a company purchases equity in another company or if companies share equity purchases. Non-equity strategic alliance: A non-equity strategic alliance is when an organization agrees to share resources with another company. Despite that they're informal alliance; they make up the majority of them.
How to start a strategic alliance
take to uphold it. Display the information you have from your research and allow them to give more detail and context about your perception of their company. Once you both discuss company information and expectations, schedule another in-person meeting in a different location to finalize the strategic alliance.
4. Outline certain opportunities Note the various ways you can work with the prospect after first meeting with them. Highlighting the different ways you can work with them denotes the interests and themes you both share. Write down the objectives and challenges you may face as an alliance so you can bring them up in the next meeting. An action plan over the next year is a foundation to help them understand the vision you have for both companies. 5. Determine revenue and profit goals Include profit and revenue goals in your notes to show how your alliance affects each company financially. These goals establish the amount of resources each company needs to have in order to meet its financial goals. Set minimum revenue and profit goals to show how successful you want the alliance to be in the first year. 6. Create an agenda Designing an agenda supplies the company with a structure for the tactics that both companies must execute. Showcasing tactics communicates the amount of work each company needs to complete to meet their benchmarks. Note the location of where these actions take place and the people responsible for the execution of each tactic to hold each company accountable during the alliance. 7. Agree to an implementation plan
Present the information in the above steps to the company in your second in- person meeting. The second in-person meeting grants you time to go over the strategy, implementation of tactics and opportunities for growth. Document feedback that they give you and make corrections regarding any gaps of information they tell you during the meeting. Find out which members you need to speak to about implementation if they agree to join your alliance. Speaking with the right contact people permits you to focus on executing the first step of the strategy.
Disadvantages of A Strategic Alliance
1. Experience communication challenges A drawback of strategic alliances a company might encounter is communication challenges. This might happen in light of the fact that an organization might have difficulties imparting data to its unions or it might convey uniquely in contrast to how the other organization imparts. Communication mishaps can make the two organizations lose shoppers and spot in the market due to an absence of believability in the event that the two organizations are not behaving expertly in its communication. To keep away from this, examine with different organizations in the collusion the best specialized strategies to guarantee all colleagues obviously grasp the objectives and tasks. 2. Earn unequal benefits In a strategic alliance, the company you work for can experience unequal benefits. In these agreements, one company may earn more benefits than the other. For example, one company may experience a 5% increase in sales while the other business might only gain a 2% revenue increase. Additionally, if one
with the team members, resolve the conflict and provide contentment for the team members.
5. Face culture or language barriers Collaborating up with at least two organizations might give culture or language obstructions as a drawback for an essential partnership. For instance, this might occur in the event that you interface with an organization in one more country in a similar industry. The organization might have various work filled weeks or societies that might make the objectives testing to arrive at by your deadline. To keep away from this, you might employ colleagues who comprehend and communicate in various dialects to help the alliance. Furthermore, you might make and take instructional classes to teach the colleagues about working with various societies. 6. Confront challenging alliance management Another disadvantage a company may experience is confronting challenging alliance management. Challenging alliance management means the other company in the agreement may lack management skills to allow the team members to complete their tasks and goals effectively and efficiently. If the other company has a management challenge, it may affect the company you work for because it can delay the tasks you require to reach the goals. To avoid this, communicate the management expectations with the other company. You may also find it beneficial to share the consequences each company may experience if it manages the alliance poorly.
Corporate Culture definition
You might need to consider the corporate culture of an organization before you choose to work for it. On the off chance that it is viable with your qualities and
working style, it can assist you with being useful and effective. Understanding the normal sorts of such societies organizations regularly have can assist you with distinguishing the organization you would appreciate working with. In this article, we investigate the significance, significance, components and properties of corporate culture and take a gander at their various sorts that organizations generally have. It alludes to the qualities, conduct and working style of an organization. It demonstrates how an organization treats its workers, clients and local area. For instance, one organization might give more significance to the climate than productivity, while another might be more worried about expanding its main concern regardless of whether its activities adversely influence the climate. Also, one organization might need to capitalize on its representatives, even at the expense of their wellbeing and individual life, while another might be more liberal towards its labor force. Albeit one strategy or occurrence of conduct doesn't comprise the corporate culture without anyone else, it most certainly demonstrates the way of life of the organization. For instance, an organization directed by the conviction of creating quality items could never attempt to give unacceptable quality items to its clients, regardless of whether that converts into higher benefits. Organizations might characterize their way of life through organization culture proclamations very much like they characterize their central goal through statements of purpose. Yet, it generally grows naturally throughout some stretch of time from the total character and demeanour of the administration and the employees it recruits. Outer elements like neighbourhood customs and customs, public financial strategy and the business in which the organization works may likewise impact the way of life of an organization. Corporate culture frequently reflects in the clothing standard, office climate, enlistment strategy, client fulfilment and any remaining parts of the organization activities. Organizations with great corporate culture as a rule have higher representative consistency standards, useful workers and a persuading workplace.
2. Values The values of a company guide the behaviour and approach it takes to realise its vision. A value statement declares the priorities of the company and tells you how it conducts itself. Thus, values greatly impact the mind set and behaviour of the employees and the expectations of the company's external stakeholders. 3. Practices The vision and values of a company reflect in the practices it follows. For example, how a company communicates its policies, how much freedom it gives its employees, what process it follows for making decisions and how it looks after its customers' concerns all give you an idea about its culture 4. People A company's culture exists largely because of the people it employs. The mind- set, attitude and behaviour of the people working for the company can give you a strong hint about the company's culture.
Types of Corporate Culture
Corporate culture might change broadly among organizations. In any case, you might experience a few normal societies between various organizations. Here are a few normal sorts of corporate societies to assist you with deciding if your guiding principle line up with them:
1. Team-first culture In this type of culture, companies focus on building a team of people that share the company's values and beliefs. During recruitment, the company gives a higher priority to values than skills and experience. As a result, the company usually has highly motivated employees who find their work meaningful.
Companies following the team-first culture look for ways to keep their employees happy. They may organise activities like team outings and frequently seek employee feedback.
2. Elite culture Dynamic and rapidly growing companies often follow an elite culture. Such companies prefer recruiting people that are talented and confident. They expect their employees to think out of the box and go beyond traditional boundaries. These companies are often involved in meaningful work, such as path-breaking research or developing some cutting-edge technology, which makes employees feel proud of their efforts. 3. Horizontal culture This type of culture is often found in small and mid-sized companies. Companies with a horizontal culture keep the hierarchical levels in their organisational structure to a bare minimum. Team members often take up multiple roles and work in a collaborative environment. You get the opportunity to learn several different aspects of the company's business. You may even have a CEO actively involved in the daily operations of the company. 4. Conventional culture You can find this culture in traditional companies like banks and public sector enterprises. Companies with conventional culture often have a tall organisational structure with clearly defined roles and job titles. The flow of authority, too, is clear. The procedures are standardised and employees typically require following the commands of their supervisors. Although it may look out dated, conventional culture may be effective in certain industries like mining and refining, where work Procedures are well-established. 5. Progressive culture
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