Strategic Alliances -A Differentiated View - Strategic Alliances - A Differentiated View – Andreas Hoffmann Jonas Prudlo Manuel Zolghadar Lund 2003 Department of Business Administration School of Economics and Management Box 7080 SE – 220 07 Lund Sweden ©2003 by Andreas Hoffmann, Jonas Prudlo and Manuel Zolghadar. All Rights reserved. Printed in Sweden. Lund 2003 Table of Contents 1 INTRODUCTION...................................................................................1 1.1 ABSTRACT........................................................................................1 1.2 GENERAL INTRODUCTION..............................................................1 1.3 TOPIC AND MOTIVATION................................................................5 1.4 FORMULATION OF THE PROBLEM..................................................5 1.5 PURPOSE..........................................................................................6 1.6 AUDIENCE........................................................................................6 1.7 OUTLINE OF THE THESIS.................................................................7 2 METHOD.............................................................................................8 2.1 PERSPECTIVE...................................................................................8 2.2 METHODS AND DATA COLLECTION................................................9 2.3 DISPLACEMENT OF GOALS............................................................10 2.4 WORKFLOW...................................................................................11 2.5 OUR BACKGROUND.......................................................................11 2.6 LITERATURE RESEARCH...............................................................12 3 THEORETICAL BASIS........................................................................14 3.1 INTRODUCTION..............................................................................14 3.2 DEFINITION OF STRATEGIC ALLIANCES......................................14 3.3 THEORETICAL FRAMEWORK........................................................18 3.3.1 COST ACCOUNTING METHOD....................................................19 3.3.2 STRATEGIC APPROACH.............................................................19 3.3.3 TRANSACTION COST ANALYSIS................................................20 3.3.4 RESULTS...................................................................................25 4 PRACTICAL CONSIDERATIONS........................................................27 4.1 EVOLUTION OF STRATEGIC ALLIANCES......................................27 4.1.1 FORMATION OF STRATEGIC ALLIANCES....................................27 4.1.2 EVOLUTION OF STRATEGIC ALLIANCES....................................30 4.1.2.1 Decision for forming a strategic alliance............................30 4.1.2.2 Configuration......................................................................32 4.1.2.3 Choice of the right partner..................................................33 4.1.2.4 Management of the strategic alliance.................................36 4.1.2.5 An alternative perception of the evolution process............37 4.2 MOTIVES FOR STRATEGIC ALLIANCES........................................38 4.2.1 ACCESS TO THE MARKET..........................................................39 4.2.2 PERSONAL CONTACTS..............................................................40 4.2.3 ACCESS TO NEW TECHNOLOGIES AND KNOWLEDGE THE PARTNER POSSESSES..........................................................................41 4.2.4 ADVANTAGES IN TIME..............................................................41 4.2.5 REDUCTION OF COSTS..............................................................42 4.2.6 REDUCTION OF RISK.................................................................43 4.2.7 SYNERGIES................................................................................43 4.2.8 MANIPULATION OF THE COMPETITION.....................................44 4.2.8.1 Suppliers of raw materials..................................................44 4.2.8.2 Buyers.................................................................................44 4.2.8.3 Firms in other industries offering substitutes.....................44 4.2.8.4 Potential new entrants.........................................................44 4.2.8.5 Rivalry among competing sellers.......................................45 4.2.9 LEAVING THE MARKET.............................................................45 4.3 RISKS AND PROBLEMS FACING STRATEGIC ALLIANCES.............46 4.3.1 CLASH OF CULTURES AND “INCOMPATIBLE PERSONAL CHEMISTRY”......................................................................................46 4.3.2 LACK OF TRUST.........................................................................47 4.3.3 WRONG REASONS FOR FORMING THE ALLIANCE AND LACK OF CLEAR GOALS AND OBJECTIVES.........................................................47 4.3.4 LACK OF COORDINATION BETWEEN MANAGEMENT TEAMS.....48 4.3.5 DIFFERENCES IN OPERATING PROCEDURES AND ATTITUDES AMONG PARTNERS.............................................................................48 4.3.6 RELATIONAL RISK....................................................................49 4.3.7 PERFORMANCE RISK.................................................................51 4.3.8 STRATEGIC ALLIANCES MIGHT CREATE A FUTURE LOCAL OR EVEN GLOBAL COMPETITOR...............................................................52 4.4 KEY SUCCESS FACTORS OF STRATEGIC ALLIANCES...................52 4.5 CONTROL CONSIDERATIONS........................................................58 4.6 THE ENVIRONMENT.......................................................................61 4.6.1 LEGAL CONSIDERATIONS..........................................................61 4.6.2 ASPECTS OF ANTI-TRUST LAWS................................................61 4.6.3 CHANGES OF MARKET CONDITIONS..........................................63 5 PERSPECTIVES AND INFLUENCES....................................................64 5.1 INTRODUCTION..............................................................................64 5.2 HORIZONTAL – VERTICAL – LATERAL........................................64 5.3 INPUT AND OUTPUT OF RESOURCES.............................................73 5.4 CULTURAL FIT...............................................................................81 5.4.1 NATURAL CIRCUMSTANCES.....................................................85 5.4.2 KNOWLEDGE OF PROCESSES AND CULTURAL DETERMINED MORAL CONCEPTS..............................................................................85 5.4.3 SOCIAL RELATIONSHIPS AND COMMITMENTS...........................87 5.4.3.1 Power Distance...................................................................87 5.4.3.2 Labour Unions....................................................................88 5.4.4 LEGAL AND POLITIC NORMS.....................................................88 5.4.5 TASK-ENVIRONMENT...............................................................89 5.4.6 CONCLUSION............................................................................89 5.5 EXCHANGE – INTEGRATION.........................................................92 5.6 EQUITY JOINT VENTURE (EJV) – CONTRACTUAL ALLIANCES.95 5.7 SIZE AND SIZE DIFFERENCES........................................................97 5.8 ANALYSIS.......................................................................................99 6 CONCLUSION..................................................................................101 6.1 CONSOLIDATED FINDINGS...........................................................101 6.2 ACHIEVEMENT OF GOALS..........................................................103 6.3 FURTHER NEED FOR RESEARCH.................................................103 6.4 OUTLOOK IN THE FUTURE..........................................................104 APPENDIX...........................................................................................105 TABLE OF FIGURES Exhibit 1: The strategic alliance in the continuum of market and hierarchy..............................................................................................18 Exhibit 2: Forms to minimize transaction costs in denpendency of specifity of investment and transaction frequency (noch ein bisschen übersichtlicher machen).......................................................................22 Exhibit 3: Potential advantages of strategic alliances compared to market and hierarchy solution..............................................................24 Exhibit 4: Strategic alliance in the dimensions of strategic risk and competence...........................................................................................25 Exhibit 6: Phases of strategic alliances...............................................30 Exhibit 5: Prisoner's dilemma..............................................................49 Exhibit 7: Value chains in horizontal strategic alliances.....................65 Exhibit 8: Value chains in horizontal strategic alliances without pooling of interests...............................................................................67 Exhibit 9: Value chains in lateral strategic alliances..........................70 Exhibit 4: Value chains and vertical strategic alliances...............71 Exhibit 11: Generic motives for strategic alliances.............................73 Exhibit 12: Archetypes of strategic alliances.......................................74 Exhibit 13: Vertical cut through Dülfer’s layered model of the environment .........................................................................................84 Exhibit 14: The importance of the different layers in different phases 90 Exhibit 15: Example for an ‘exchange alliance’ based on Porter’s model of a value chain..........................................................................93 Exhibit 16:Example for an ‘integration alliance' based on Porter’s model of a value chain..........................................................................94 Exhibit 17: Resource contribution of asymmetric sized strategic alliances................................................................................................98
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