A strategic alliance is a term that has been used to describe a kind of relationship that exists between the business partners and it has been said that these are the relationships that have been seen to cover all the activities that are to be performed by the parties to achieve the goals and the aims that are set by the firms.
Gajda, (2004) has argued that the goals that have been set by the partnering organizations are in need to be achieved by an implementation of strategic alliance and these partnering firms function independently. Hoskisson, (2008) has discussed that the partners provide strategic alliance services by the help of providing resources like products, capabilities relating to manufacturing, channel distributions, knowledge expertise, project finding as well as intellectual properties. In other words, the alliance has been known as a kind of cooperation that exists between the business partners, as the fact that has been realized from this kind of partnership is that mutual benefits gained are higher as compared to the strategies being applied in an individual mode by the firm. Technology transfer has been the main aspect of strategic alliance as it grants access to knowledge and expertise associated with the knowledge with a specialization in finance and economics and the ability to share the risks and the expertise.
Glaister, Husan, and Buckley, (2004) have argued that there are three main types of strategic alliances being used by the organizations and these are inclusive of joint venture strategic alliance and this is one of the major kinds of strategic alliances in which the firms play their roles by creating independent companies and by doing this the firms make sure that the limited number of resources are shared along with all the capabilities to achieve a competitive edge in the market.
Glover and Wasserman, (2003) have discussed that the second major form of the strategic alliance is the equity strategic alliance and this is the case in which the firms own different percentages of the companies and this is implemented in foreign direct investments.
Glover and Wasserman, (2003) argue that Australia has been witnessing an increase in bundling that has been seen in the case of petrol and groceries as the customers are offered a per liter discount on the petrol purchases that are made along with the groceries. Thereby it has been seen that there is a kind of partnership that exists between the grocery store owners and the petrol pump owners. An example, in this case, is Cole supermarket that offers the discount vouchers for the Shell petrol while the Woolworths/Safeway supermarkets are the ones that have been offering the discount vouchers for the customers of Caltex petrol. It has been noticed that the jointly branded services are being provided by Caltex and Woolworth
Hoskisson, (2008) adds that the kind of alliance that has been formed between Cole supermarket and Shell has been the one in which 584 petrol retailers are covered by the Cole supermarket owners. The difference that has been noticed in the case of alliance being provided by the Coles/Shell and the Woolworths/Petrol Plus is that one of the greatest petrol retailers has been joining forces with Cole supermarket in Australia. In addition the Shell/Cole alliance had not been able to increase any sales in the retailing and the petrol business and there were no new entries in the market in this case. Moreover, the bundling aspect that was provided by the Shell/Cole alliance is the one that was unable to be justified if the complementarities of the products are kept in mind. Can be argued here that the demands of the customers in cases of the purchases of the petrol might be higher but still, in this case, it cannot be anticipated that the customer at Coles will be able to gain any kind of intrinsic value if a customer can buy the petrol from Shell. The alliance between Shell and Cole deals with taking over the management section of the retail section of Shell petrol express stations and at the supermarkets of Cole, the discounted vouchers will be provided to the customers.
Glover and Wasserman, (2003) argue that this has been realized by Woolworth and they have announced that a joint venture shall be started with Caltex to offer the customers the petrol discount offers all over Australia. Thereby the kind of strategic alliance that is being applied in the case of these two bundling companies is a joint venture strategic alliance as the customers are being offered discounts at different branches of the stores and it is noticed in the case of Woolworth as well. In this case, one main fact that has been realized is that the incoming profits are higher as well as the demand side and supply side advantages that have been associated with the joint venture alliances.
Gajda, (2004) argues that many reasons have been associated with the establishment of strategic alliances with the other firms. Collaboration theory has been used to understand the real benefits associated with strategic alliances between firms. In this case, the collaboration has been analyzed to be difficult to be put into practical use by the firm owners and it has been regarded as being elusive. This is the theory that has suggested that collaboration can capture more benefits as compared to the limited benefits that have been gained by the strategic alliance. Among many advantages that are gained by the use of strategic alliance, creation of values between the firms, and an increase in the use of the cooperative strategies are the ones that are achieved by the firms. The joint strategic alliance makes sure that a constant improvement takes place in the supply chain, service levels, as well as refurbishments. The amenity initiatives are in focus and these can help in gaining more of the customer response and the sales volumes in the markets. These are the strategies that have been seen to increase the growth in sales for Woolworth/Caltex in Australia as much as an increase of 7.5% growth has been seen in the passing years.
Conclusion
Partnering in the firms is always done to achieve the maximum benefits in the form of maximum gains of the values and the customer feedback. In addition to this, these are the strategic alliances that can help a company align the goals that it has about the buying and selling in the market.
References
Gajda, Rebecca. (2004). Utilizing Collaboration Theory to Evaluate Strategic Alliances. American Journal of Evaluation, 25(1): 65-77.
Glaister, W. Keith., Husan, Rumy., and Buckley, J. Peter. (2004). Strategic business alliances: an examination of the core dimensions: New horizons in international business. Edward Elgar Publishing.
Glover, I. Stephen., and Wasserman, M. Craig. (2003). Partnerships, joint ventures & strategic alliances, Volume 1: Business law corporate series: Partnerships, Joint Ventures & Strategic Alliances. Law Journal Press.
Hoskisson, E. Robert. (2008). Strategic management – concepts and cases: competitiveness and globalization. Cengage Learning.