Question

What is globalization and why does it matter to companies? Discuss some of the challenges that managers must overcome in making strategic alliances successful. What are some strategic alliances with which you are familiar? Were they successful or not? Explain.

Answer 1

The presence of operations of companies in multiple countries, amalgamation of economies and interaction and movement of goods ,services. Culture and ethnicities across the globe is globalization.

It matters to companies as stiff competition is there in domestic and imported goods on the basis of tariff ,quality & services and cost of production. The challenges of Strategic Alliances are generally to choose the right partner after market research which has the deep penetration and reach to the masses. The more brand awareness among the new market is to be spread and build a sense of trust and faith with the strategic partner. There should be win-win situation for the partners. The strengths of the strategic partners should be reaped and focus on strengthening in all the realms of products and services they can offer. The resource and knowledge pooling enhances the strength of the strategic allied partners. There are different types of strategic alliances like Joint Venture , Outsourcing, Distribution ship, Franchising , Product & technical licensing. I am familiar with strategic alliance with Janus Packaging India and Edelmann Group , Germany . The former being a packaging company in India with 15 % growth per year had got in JV with Edelmann Group , Germany in 2013 . The basis of Joint Venture was buying 65 % stake in the company , sharing profits , revenues, and resources and knowledge sharing. The huge investment by German company in buying new machines could not reap the results as Indian market did not have the market for premium products resulting in breakup of the strategic alliance as there were huge losses in 2017. Inability to tap market requirement and need of customers resulted into debacle of the joint venture.