Answered Essay: What are strategic alliances? What types of strategic alliances are there for MNC executives to consider?

What are strategic alliances? What types of strategic alliances are there for MNC executives to consider? What is a joint venture? What factors do two or more firms have to consider when setting up a joint venture? What are some of the cultural dynamics Luthans and Doh assert that can undercut the smooth operations of a JV? Do you agree? Are there others to consider? If so, why? In the process of writing, describe relevant cultural factor determinants as articulated by both Geert Hofstede and Fons Trompenaars.

Expert Answer

 

Strategic Alliance can be described as relationship or agreement between two or more entities who agree that they will share resources for getting mutually beneficial objective.

Types of Strategic alliance are as follows:

  • Procompetitive Alliances: these are characterized by low conflict and low interaction. These types of alliances provides benefits of vertical integration. It creates a relationship between supplier and manufacturer.
  • Noncompetitive Alliances: These are characterized by low conflict and high interaction. These kinds of alliances formed between two or more companies who are same business but are not rivals. The operations of the companies in this type of alliance do not coincide and are quite distinctive.
  • Competitive Alliances: These are characterized by high conflict and high interaction. In this type of alliance two companies come together to form alliance who are rivals. These alliances are inter-industry or intra-industry.
  • Precompetitive Alliances: These are characterized by high conflict and low interaction. In these types of alliances two companies from different background come together to work for common goal and activities such as new product or technology development.
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