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The GMSS Export Tutorial
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Welcome to Export TutorialNotes on Contents of Tutorial    Core Processes

Export Development RoadmapBuild Export AwarenessDevelop/Assess Export ReadinessConduct Export Operations       Techniques 
        & Resources

Apply E-commerce LeverageConsider Strategic AlliancesTap Third-party Service ProviderrsAppendicesTable of Contents

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
6. Consider Strategic Alliances (SA's)

Strategic alliances can multiply resources for an international market development campaign, and multiply potential market results.  This section explores a few of the what's, why's, and how's of the increasingly common practice.

 | Why Consider SA's | The SA Continuum |
| How-to (Step by Step) | Partner Relationships Flowchart | 
 | GMSS SA Guidebook | Information Sources |
Why Consider Strategic Alliances?


What motivates a business to explore the option of strategic alliances?  Here is a list of potential benefits (which must be balanced against risks before making a commitment).

  Multiply market entry alternatives and available 
       resources.
  Access foreign technology. 
  Access otherwise closed or resistant markets.
  Gain cost advantages (scale and factor costs).
  Employ managers experienced in target markets.
  Realize political and legal advantages through 
       established relationships.
  Exploit operational synergies.
  Limit exposure of own corporate assets.

Click here for a brief description of the benefits. 

The "Strategic Alliance Continuum"

A company has many choices in structuring a program to serve foreign markets.  Simplest among these may be the appointment of stocking distributors or multiple sales agents.  But common practice increasingly includes a broad, flexible range of options designed to multiply available resources and speed market development results. GMSS labels the set of options the Strategic Alliance Continuum. 
 

The Strategic Alliance Continuum

1      2      3      4      5      6      7      8      9      10      11
<---------------------------------------------------------->

Decreasing FOREIGN PARTICIPATION & INFLUENCE Increasing
1. Foreign Branch
2. Foreign Subsidiary
3. Privatization
4. Foreign Distribution 
     Agreement
5. Bidding Consortium		 6. Minority Interest
7. Majority Interest
8. Merger (Buy-out)
9. Contractual Joint Venture
10. Equity Joint Venture
11. Merger (Sell-out)

Click on a number above for a brief description of the listed option or click here for the complete set.  (Each opens in a new window.) The list is not closed-ended, and is limited mainly by paticipants's imagination.
 


 
How to Set Up and Run a 
Strategic Alliance  (Step by Step)


Regardless of the market-entry strategy and the form of alliance being considered, there are a half-dozen logical steps or phases that the initiator will go through, from the idea stage to full operation.

1. Opportunity Study

2. Partner Search 

3. Project Development 

4. Formalizing Agreement(s)

5. Project Implementation 

6. Day-to-day Operation

Click here for brief discussions of each step.

 
 
GMSS's "Basic Guide" to SA's
The subject of strategic alliances is straightforward,  but multi-faceted.  Many aspects call out for attention.   This section of the GMSS Export Tutorial cannot cover  them all, even superficially. 

Some years ago, with corporate sponsorship, GMSS published a comprehensive "basic guide" to strategic alliances, focusing on international joint ventures.  This section draws heavily on parts of that publication. 

Readers may find the document's table of contents very useful as a checklist for topics of interest and a basis for further study.  The listing can help a reader appreciate the range of elements that may be covered in such a relationship and that may influence the quality of results.

Click here to view the table of contents of the IJV Guide.

 
 

 
Strategic Alliance Relationships


   The chart below shows the shared resources and joint or complementary operations that are typical of a strategic alliance.  This example was drawn to reflect an equity joint venture, but could just as well represent any of a range of  multi-functional contractual relationships.


 
 
 


 

Additional Information 


Since the design and execution of an alliance is so crucial, it deserves careful exercise of due diligence, and conscientious review of available invormation sources.  Here are a few starting points. 

Web Resources: http://www.thinkkentucky.com/kyedc/biznet.asp
Articles: http://www.thinkkentucky.com/kyedc/alliarts.asp 
International Joint Ventures, A Basic Guide to Strategic Alliances for Medium-size and Smaller Companies, W.R. Millager, Global Marketing Support Services, 1997.
 
 
 

©2005 The Board of Trustees of the University of Arkansas
1/25/2005