Human Resourse Management :: GCSE Business Marketing Coursework

HRUCTION The topic under review is strategic alliances. This exceptional form of non-equity alliance between firms in the same industry (competitors) is becoming an increasingly popular way of conducting business in the global environment. Many contrary reasons of why such alliances are occurring have been recognized. These include the increasing globalization of the worlds economy resulting in intensified global competition, the proliferation and disbursement of technology, and the shortening of product life-cycles. This inspection will use Kenichi Ohmaes viewpoint on strategic alliances as a benchmark for comparison. Firstly, a summary of Ohmaes article will be provided. Secondly, in assign to critique Ohmaes opinion, it will be necessary to review other literature on the topic. Thirdly, a discussion of the various viewpoints and studies, that have hence arisen, will be discussed in detail. Finally, conclusions will be drawn with implications for companies operating in t odays global environment, together with suggestions for future research on strategic alliances. THE GLOBAL LOGIC OF strategic ALLIANCES The underlying argument or reasoning behind Ohmaes opinion that strategic alliances, or entente, are the only way forward for all companies competing globally. Globalization mandates alliances, makes them suddenly necessary. (Ohmae, 1989). The author has supported this viewpoint, that globalization makes strategic alliances necessary as vehicles for customer-orientated value, with four issues facing todays companies 1. The Californization of Need 2. The Dispersion of Technology 3. The Importance of Fixed Costs, 4. Dangers of Equity. The first issue, describe by Ohmae as the Californization of Need, refers to the convergence of customer needs and preferences and the fact that the national identity of many high-quality products has virtually disappeared. Secondly, companies pile no longer maintain a leadership position based solely on super ior, advanced technology. This results because of the increasing number of critical technologies embedded in the majority of products, therefore, no one can keep the technology out of the hands of competitors around the globe. Thirdly, Ohmae emphasizes the importance of fixed costs. He believes that companies can no longer compete by keeping their unsettled costs lower than their competitors. The majority of costs incurred by companies these days are fixed costs, therefore, what matters is maximizing marginal contribution from fixed costs and a reasonable way to do this through forming strategic alliances. The final issue Ohmae identifies is dangers of equity.