Chapter 07

7197 words 29 pages
General Outline
Opening Profile: From BP to Exxon: Beware the Alliance with the Bear!
Strategic Alliances
Joint Ventures
Equity Strategic Alliances
Global Strategic Alliances
Global and Cross-Border Alliances: Motivations and Benefits
Challenges in Implementing Global Alliances
Implementing Alliances Between SMEs and MNCs
Under the Lens: Dancing with Gorillas: How SMEs Can Internationalize Through Relationships with Foreign Multinationals
Guidelines for Successful Alliances
Comparative Management in Focus: Joint Ventures in the Russian Federation
Implementing Strategy
Implementing Strategies for SMEs
Under the Lens: Breaking Down Barriers for Small Business Exports
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Cross-border partnerships, in particular, often become a “race to learn”—with the faster learner later dominating the alliance and rewriting its terms. In a real sense, an alliance becomes a new form of competition.
3. All too often, cross-border allies have difficulty in collaborating effectively, especially in competitively sensitive areas, creating mistrust and secrecy, which then undermine the purpose of the alliance. The difficulty that they are dealing with is the dual nature of strategic alliances—the benefits of cooperation versus the dangers of introducing new competition through sharing their knowledge and technological skills about their mutual product or the manufacturing process. Some of the tradeoffs of the duality of cross-border ventures are shown in Exhibit 7-1.

Teaching Resource: Booz-Allen & Hamilton is one of the leading consulting firms on Alliance formation worldwide. The Web page is at

4. The enticing benefits of cross-border alliances often mask their many pitfalls. In addition to potential loss of technology and knowledge-skill base, other areas of incompatibility often arise, such as conflicting strategic goals and objectives, cultural clashes, and disputes over management and control systems.

II. Implementing Alliances Between SMEs and MNCs (see slide 7-13)

All countries have a large proportion of business enterprises which are small or medium sized (SMEs). But


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