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Chapter 7: Global Alliances and Strategy Implementation

Chapter 7: Global Alliances and Strategy Implementation. PowerPoint by Hettie A. Richardson Louisiana State University. Strategic Alliances.

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Chapter 7: Global Alliances and Strategy Implementation

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  1. Chapter 7:Global Alliances and Strategy Implementation PowerPoint by Hettie A. Richardson Louisiana State University

  2. Strategic Alliances • Partnerships between two or more firms that combine financial, managerial, and technological resources and their distinctive competitive advantages to pursue mutual goals • Also referred to as cooperative strategies

  3. Categories of Alliances • Joint Ventures • PSA Peugeot-Citroen Group and Toyota • Equity strategic alliances • TCL-Thompson Electronics • Non-equity strategic alliances • UPS and Nike • Global strategic alliances • Covisint

  4. Motivations and Benefits of Global and Cross-Border Alliances • To avoid import barriers, licensing requirements, and other protectionist legislation • To share costs of research and development • Toshiba • To gain access to markets that favor domestic companies • To reduce political risk • To gain rapid entry into a new or consolidating industry

  5. Challenges in Implementing Global Alliances • Many alliances fail or end up in takeover • Choosing the right form of governance • The benefits of cooperation vs. the dangers of new competition

  6. Guidelines for Successful Alliances • Choose a partner with compatible strategic goals and objectives • Seek complementary skills, products, and markets • Work out how each partner will deal with proprietary knowledge or competitively sensitive information • Recognize that most alliances only last a few years

  7. Assignment • Compare the ”guidelines” above with • Strategic Choice fig 6.6 and 6.10 (chapter 6) • Which • Motivators • Challenges • Guidelines • Consider for each of the entry modes mentioned in fig 6.10?

  8. Comparative Management in Focus: JVs in the Russian Federation

  9. Comparative Management in Focus: JVs in the Russian Federation • Investigate whether a joint venture is the best strategy—acquiring a Russian business may be better • Set up meeting with appropriate authorities well in advance • Be above board in paying taxes • Set up stricter controls and accountability systems • Make it clear your firm does not pay bribes • Assign the firm’s best managers and given them enough authority • Take advantage of local knowledge by hiring Russian managers • Designate considerable funds for promotion and advertising to establish an image

  10. Strategic Implementation • Involves putting decisions about global alliances and entry strategies into action • Successful implementation requires creating a “system of fits” • Resources must be allocated • Leadership is key

  11. Implementing a Global Sourcing Strategy • Examine your reasons for outsourcing • Evaluate the best outsourcing model • Gain the cooperation of management and staff • Consult your alliance partners • Invest in the alliance

  12. Managing Performance in IJVs • IJV control: Ensures that the way a joint venture is managed conforms to the parent company’s interests • Choice of partner • Suzuki and TVS Motor in India • Organizational design and strategic freedom

  13. Managing Performance in IJVs • Three complementary dimensions of IJV control: • The scope of activities over which parents have control • The extent or degree of control • The mechanisms of control

  14. Knowledge Management in IJVs

  15. Assignment • Give a realistik proposal for how to build a Knowledge Transfer Policy – Choose one of the entry modes in fig 6.10 as startingpoints

  16. Government Influences on Strategic Implementation • Unpredictable changes in governmental regulations • China’s new restrictions on foreign investors • Caterpillar and tax breaks • Ousting of Indonesian President Suharto in 1998

  17. Cultural Influences on Strategic Implementation

  18. Cultural Influences on Strategic Implementation • Six dimensions of national and corporate culture that affect alliances: • Organizational formality • Participation in decision-making • Attitudes toward risk • Systemization of decision-making • Managerial self-reliance • Attitudes toward funding

  19. Cultural Influences on Strategic Implementation • The American need for autonomy and independence can cause problems with head office Europeans • Mercedes in Tuscaloosa, Alabama

  20. E-commerce Impact on Strategy Implementation • E-commerce enablers • NextLinx

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