A clear plan for implementing the alliance should be discussed, created, and activated once the partners have agreed to the alliance.
a) assign responsibility
b) plan implementation
c) prioritize resource allocation
d) careful selection of partner
Answer: B
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Business Strategy Chapter 6
- Careful and dedicated management can help build the trust necessary to ensure that each firm cooperates in an effort to maintain a successful alliance
- In the evaluation of an alliance' value, the partners who are, in turn, allied with the firm's strategic alliance partner should also be considered.
- The means for analyzing the alliance's performance and for distributing performance outcomes to the partners should be clearly established.
- The organization should analyze each alliance's priority within its resource allocations and ensure the commitment needed for each alliance to succeed
- The manager or sponsor from each firm should be appointed to keep each other informed of major alliance activities, resource allocations, and outcomes.
- Managing Strategic Alliance: if an incompatible partner is selected, the alliance is likely to fail. The firm should understand its partner's situation, resources, capabilities, etc
- Usually more difficult to manage and sustain because often the partners are also competitors
- Involves cooperative partnerships at the same stage of the value chain
- Involves cooperative partnerships across different stages of the value chain. Key to success = trust between partners
- What is the primary purpose of a strategic alliance
- A relationship between firms in which the partners agree to cooperate in ways that provide benefits to each firm
- Which strategy works the best:
- What are the three steps of bi-cultural audit:
- When the vertical acquisition is going upstream it is getting:
- A transaction in which businesses are sold to other firms or spun off as independent enterprises
- Regardless of effort, acquisitions often fail between ___ and ___ percent of all mergers fail to return a positive investment.
- Acquired company embraces acquiring firm's culture. (Acquired firm has a weak culture.)
- Acquiring firm imposes its culture on unwilling acquired firm. (Rarely works- may be necessary only when acquired firm's culture doesn't work but employees don't realize it.)
- Combining two or more cultures into a new composite culture. (Existing cultures can be improved.)
- Merging companies remain distinct entities with minimal exchange of culture or organizational practices. (Firms operate successfully in different businesses requiring different cultures.)
- The practice of diagnosing cultural relations between companies and determine the extent to which cultural clashes will likely occur
- Moving upstream by acquiring businesses that supply inputs to a firm's core business or downstream by acquiring businesses that use the outputs of the firm's core business
- Purchasing a supplier or distributor of one or more of firms good/services
- Purchasing a competitor competing in the same market(s) as the acquiring firm
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