Friday, April 2, 2010

Forms of strategic alliance

Forms of strategic alliance
a.Owners based strategic alliance.They can be:
  • Joint ventures :They are based on ownership sharing.They are formal arrangement by two or more independent organizations to set up a jointly owned new organization.The ownership can be in terms of shareholding or agreements for profit sharing.
  • Consortia:The involves two or more organizations in a joint venture arrangement focus on a particular project.For example,Philbert hotel in Pokhara is the result of consortia between various banks.It involves pooling of resources and competencies.
b.Contract based strategic alliances .They can be :
  • Licensing :It is a contract which grants the right to manufacture a patented product for a fee.It is common in science and technology based industries.
  • Franchising :It is contract which grants the right to use a brand name for specific activities such as manufacturing and marketing in return for a royalty.The franchiser provides quality assurance and training.Coca cola is an example.
  • Subcontracting :It is subcontracting particular part of a process or services to mortised supplies.For example,wast collection from each house.
c.Market based strategic alliance.They can be :
  • Networks :They are arrangements whereby two or more organizations collaborated without formal relationships.It is based on mutual advantage and trust.This is popular in airlines industry.
  • Opportunistic alliance :They are based on loose arrangements.They focus on particular projects.They indicated market relationships.

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