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4880229 Pakorn K.

4980362 Piti R.4980412 Sutatip T.4980418 Pornwalai

Ph.

The reasons of strategic alliances are obvious when you understand the benefits of the alliances.

There are many reasons for business to do an alliance such as research, production, marketing, distribution, or management.

There are several areas that strategic alliances can benefits organizations.These are as follows:

Products Access Operations Technology Strategic Growth Organization Finance

Work hard to develop the Outrageously Successful Relationships (OSRs)

An Exchange of Technology Helps improving basic strength for both you and your

alliance such as improvement on production capabilities to better serve the customer.

For example, Kinko’s Service Corporation, copy centers, alliance with Xerox Engineering systems to create a nationwide network for faxing large-format documents which serves the needs of architects, contractors, and advertising agencies.

Technical Hotlines and On-Site Technical Support An online support from the alliance supplier which would

helps in improving customer service segment.

A Technological Contribution or a Technological Edge in Your Industry Create product integrations, new inventions, or technological leaps Provide competitive advantage to you and your alliance For example, The alliance between IBM and Apple to develop a

new computer operating systems Alliance does not need to be permanent

Learning Curve Commitment Experience gained in producing new products along with

costs saving because of the cost sharing from alliances. Better Sales and Technical Training for Your Employees

Benefits gained from having an alliance with your suppliers.

Training programs for employees of manufacturers or distributors

Helps improving relations between sellers and buyers.

Co-branding: snack manufacturers are now mixing two nationally known names and logos on a single product. For example, Betty Crocker’s Soda Licious, (soda pop fruit snacks), made with 7up and 7up cherry.

Access to new markets: both domestic and international may be available. Positioning for the future needs: Through partnering, one company can assist another in leapfrogging current industry leaders. This would be done by cooperating with newer firms more willing to pursue a riskier development strategy to gain market share.

Sales leads and help in procuring new business

Opportunity to expand business using new or related product innovations and service offerings

Preferred supplier status: Steelcase in Grand Rapids, MI awards a designation as a preferred supplier to those who have proven their performance abilities.

Reduce direct competition: The Sun and IBM alliance has attempted this in creating the Java operating system to keep Microsoft at bay.

To gain market share: Coach, the New York headquartered manufacturer of fine leather products, teamed up with Lexus in an exclusive partnership to produce the limited Lexus ES 300 Coach Edition.

Geographic Expansion: the business can expand throughout different parts of the world with the benefits of becoming partnerships among domestic and international companies.

Create marketing synergism to the consumer through cross promotion: Blockbuster and Dominoes Pizza created a promotion that required a customer to rent three movies, in return they received a $10 saving book for Dominoes Pizza. Both partners got increased traffic through the joint promotion.

Barriers to market entry by a new player: This protects the current players and to find ways or methods that closed an opportunity to a new provider attempting to enter the market.

Marketing assistance to support order volume for product: This can happen when a small company develops an alliance with a large company who can assist with manufacturing, fulfillment, distribution, and so forth.

Improved attitude toward customer service Need support from top management Manufacturer partnering with dealers and retailers,

then helping with customer service tools and training

Improved customers loyalty United airline and Starbuck: serving Starbuck coffee

on flight Improved product offering

Through alliance buying corporative Additional product lines

Profit greatly to computer and electronics industries

University of Toronto’s Innovations Foundation signed an agreement with Northway Explorations Ltd. To deliver polymer-modified asphalt materials technology for longer lasting roads.

In Manufacturing Sharing resources and outsourcing allow a synergistic partnering

agreement and allow to concentrate on your core strengths. Donnelly Corporation and Applied Film Laboratory.Inc. for liquid

displays (LCDs) In distribution

Developing access to orders that can be economically and efficiently produced and delivered.

Shared locations Banks across the country adding branch offices in supermarkets-

simplifying the lives of consumers by reducing the amount of time customers spend.

Wal-mart and McDonald

Partnering in poor economy or recession when sales are flat and prices are deflating. Continental Airlines accessed optical, Inc.

Access to capital Achieving economies of scale when sharing facilities,

equipment, and employees Prompt payment per agreed terms in customer/supplier

alliance More potential profit Sharing financial risks associated with developing new products

and entering into new markets.

Working together are successfully purchasing goods in parity with the two giants in their industry For example: American Dental Cooperative members and

dental distributors Additional discount and services for in-depth

marketing and technical expertise. Win/Win pricing becomes possible in long-term

buyers/seller alliance relationship

There are many supply chain improvement areas that can achieve from doing strategic alliance Just-in-time inventory purchasing and supplying are a great

boon to the bottom-line for example, Wal-Mart and Proctor & Gamble , Home Depot and

Dell Computer Management of Supply Channel conflict On-time Product delivery Prompt response To complaints Greater Consistency in parts, suppliers, semi-assembled,

and completed products Detailed agreement as to handling of product problems and

customer complaints Improved supply chain productivity Specific (quarterly, yearly, etc) volume commitment Key contacts who are dedicated and price problems Improved supplier loyalty Prompt response to quote requests and price problems Confidentiality of shared business strategy

For example The Arizona and California Departments of Transportation have successfully discovered that the partnering approach benefits

Such as working with the construction industry, they eliminated the tangle of claims, litigation, and adversarial relationship

Here’re some additional productivity increases that can be achieved through strategic alliance relationships

Market intelligence relating to new products, processes and competitive technologies and markets

Market forecast for large orders to allow intelligent production schedules

Improved product quality Improved working relationships Improved communications through structure to promote

operating efficiencies Improvement of products/services Sharing of information Improved culture and business philosophy Recognition, award and/or reward system for meeting and/or

exceeding established goals Reduced paperwork

The benefit to developing strategic alliances with others will be found in creating solution through mutually beneficial efforts.

It can help you solve problems and get you much closer to your goals than working toward them w/o the relationship

In additional, it can improve the quality, productivity and profitability if you apply it decisively.