Strategic Alliances: Building, Leading and Managing

STRATEGIC ALLIANCES : BUILDING , LEADING AND MANAGING

2007

Strategic alternatives results into large number of alternatives through which an organization relates itself to the environment On the study of environmental analysis , four grand basic strategic alternatives to garner the market share

Expansion : This is adopted when environment demands increase in pace of activity . Company broadens its customer groups , customer functions and the technology . This kind of a strategy had a substantial impact on internal functioning of the organization

Modernization : Through modernization , the company aimed to gain competitive and strategic strength

p Integration : Through forward integration it gained ownership

over distribution and retailers , thus moving towards customers

Molecular Modelling Of Long Term Approach Licensing : Licensing permits a company in the target country to use the property of the licensor . Such property usually is intangible , such as trademarks , patents , and production techniques . a fee in exchange for the rights to use the intangible property and possible for technical assistance . Licensing has the potential to provide a very large ROI since this mode of foreign entry also does require additional investments . However , since the licensee produces and markets the product , potential returns from manufacturing and marketing activities may be lost . Licensing policies , quota restrictions , import duties Forex regulations , restrictions on FDI flows , controls on distribution and pricing of commodities together made business difficult during earlier years . The norms compare the performance of an organization in the same industry or sector against a set of agreed performance indicators . Data on industry norms are widely available and can be found from several published sources . Using such data and comparing an organization against others in its industry helps the organization understand its true position

Functional Area Objectives for Strategies The five forces framework developed by Michael Porter is the most widely known tool for analyzing the licensing environment , which helps in explaining how forces in the competitive environment shape strategies and affect performance . The framework suggests that there are competitive forces other than direct rivals which shape up the competitive environment . These competitive forces are as follows

1 ) The rivalry among competitors in the industry

2 ) The potential entrants

3 ) The substitute products

4 ) The bargaining power of suppliers

5 ) The bargaining power of buyers . However , these five forces are not independent of each other . Pressures from one direction can trigger off changes in another which is capable of shifting sources of competition These five forces are placed to understand how each of these forces affect an Industry 's environment so that one can identify the most appropriate strategic position within the industry

Diversification : Diversification through the horizontal route involved change in business definition in terms of customer functions , customer groups or alternative technology . It was done to minimize the risk by spreading over several businesses to capitalize organization strength and minimize weaknesses , to minimize threats , to avoid current instability in profit sales and to facilitate higher utilization of resources

Rational for Diversification

Enhanced Market Power- Not always market share does not necessarily translate to higher profits - greater...