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Advantages and Disadvantages of Strategic Alliances and Joint Ventures: Discuss With ReferenceTo the Auto Car Industry.
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ADVANTAGES AND DISADVANTAGES OF STRATEGIC ALLIANCES AND JOINT VENTURES: DISCUSS WITH REFERENCE TO THE AUTO CAR INDUSTRY
BY MIMI ASANTE
STUDENT ID: 9623260
READING COLLEGE OF ARTS AND DESIGN
Discuss the Advantages and Disadvantages of Strategic Alliances and Joint Ventures
Strategic alliances are partnerships whereby two or more firms choose to cooperate for their mutual benefit by combining their resources- financial, managerial, and technological as well as their competitive advantages. Alliances are often called cooperative strategies. Cooperation between international firms can take many forms, such as co-funding of research projects, sharing of production facilities and marketing of each others products using existing distribution networks. For example in March 2000, General Motors and Fiat formed a strategic alliance creating an important partnership in two of the world's largest automotive markets: Europe and Latin America. The alliance promises an opportunity to make value for GM shareholders through significant synergies in such areas as parts cost reduction, optimisation of activities regarding power-train modules, efficiency in financial service operations, cross-sharing of automotive technologies, common platforms and architectures. Each participant was motivated to promote its self-interest but had determined that cooperation was the best way to achieve
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