STRATEGIC ALLIANCE

STRATEGIC ALLIANCE 3

STRATEGICALLIANCE

StrategicAlliance

Astrategic alliance is a relationship between firms that allows themto act as partners and create a value they could not have developedwhen acting independently (Ireland et al, 2006). Some of the recentstrategic alliances include Microsoft and Barnes &amp Noble, Kodakand Samsung, and Accenture and GE. In this strategic alliance, bothcompanies jointly market their other products as complementaryproducts or come up with a new product.

Thegoal of the alliance between Microsoft and Barnes &amp Noble is toincorporate new technologies to improve reading digital contents inthe current digital world. These companies plan launched a newproduct, Nook Media, which they claim that it provides a digitalworld-class, reading experience (Andrew 2012). Samsung and Kodakalliance has reflected the strength of both companies’ technologyin the development of new inkjet printers. This has enabled bothcompanies to leverage each other technology and increase competitionand sales. On the other hand, the goal of the alliance between GE andAccenture was to improve efficiency and productivity, increase thechain of supply, as well as, reduce operational and maintenance cost.

Innovationis the central reason for the above mention alliances. More so, othermajor motives include the need to improve competition, reducetransaction cost and spread risk, and the need to achieve economiesof scale. Although strategic alliance carry risks, many companiesmeet their goal as they are able to enter foreign markets, gainingaccess to special skills, conform to host government policy, as wellas, strengthen vertical linkages with suppliers and distributionchannels (Venzin, 2008). For this reason, strategic alliance can belabeled as successful, especially if both companies achieve theirgoal, and recover the financial costs of capital that was invested inthe alliance.

References

Andrew,K. (2012). Microsoftand Barnes &amp Noble complete $300 million strategic alliance.Pocketgamer.bizOctober 4th,2012

Ireland,R. D., Hoskisson, R. E., &amp Hitt, M. A. (2006). Understandingbusiness strategy: concepts and cases.Mason, OH.: Thomson Higher Education.

Venzin,M. (2008). Buildingan international financial services firm: how successful firms designand execute cross-border strategies in an uneven world.Oxford: Oxford University Press.