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Problem

Knowing how to be a good partner is an asset in the business market as Cisco Systems clearly demonstrates. Describe the characteristics of a successful strategic alliance and outline the steps that alliance partners can take to increase the odds that alliance goals will be achieved.

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Step 1/3

Strategic alliances explain the healthy relationship between firms/companies to improve their operational performances. Two or more firms can get into strategic alliances on agreed objectives and terms.

Step 2/3

A successful strategic alliance relationship will have the following characteristics. First of all, the firms will be able to access the latest market technology with the help of partner firms. Secondly, the firms in the strategic alliance can attain economies of scale. They get exposed to more markets and thus, can enjoy economies of scale. Thirdly, the firms can launch their products quickly in new markets. They can use the distribution channel and marketing strategy of the partner firm that will minimize their cost of operation. Finally, it helps to share risks and costs. A successful strategic alliance allows the firms to share their uncertainty and cost with each other. Thus, they can minimize the threats and impact of these challenges and risks.

Step 3/3

There are five major steps through which a successful strategic alliances relation can be established. First of all, they should build a dedicated alliance function. The firms should measure the value and benefit that they can incur with this strategic alliance. Secondly, they should develop a joint venture proposition. Here, they should develop and share strategies with specific value propositions that can be delivered to the customer. There should be a close statement for value proposition between the firms and they should jointly offer them to the customers. Thirdly, the firms should develop a close work relationship between them. Interpersonal connections and collaborative strategies to be developed. This helps to develop effective communication and work relationship. The fourth step is to establish a connection between boundary and spanning. This means the managers of the firms should have strong and healthy relationships and communication. This way they can share their common goals and norms creating social relationships. Finally, integrate the point of contracts that they have. They can integrate their relationship strategically, tactically, operationally, interpersonally, and through cultural integration too.