Question

What costs are incurred in developing strategic alliances? How can these costs be managed?

Answer 1

SOLUTION:-

* There are various costs incurred at the time of strategic alliance and companies who agreed together to work for a specific group of objectives making both the companies benefitted by the same. Costs like Inventory management costs, human resource management, processing costs, product costs, maintenanace costs, general forecasting and miscommunication costs, equipment costs, quality issues and costs etc are incurred.

* All of these costs are to be effectively managed by both firms. These costs could be managed by having a detailed amount of planning, budgeting, accurate forecasting and analysis of the environments of the organisation. By knowing beforehand what you are going to do in your organisation, you can pre plan the requirement of the resources to achieve them accordingly. By forecasting and studying about the organisation, you can also have an estimate idea regarding how well are they performing or not and thus take right decision to invest and control the costs to have a good rate of success.