Discuss Global Multilateral Alliances Commerce Essay

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According to ABC1 the removal of regulative barriers has increased the global competition where competitors have high standard industry, intensive knowledge and expertise in telecommunication and electronic field and capability to develop multi technological platform. In order to survive in high competitive market, this demands a high investment and strong distribution channel and operational efficiency. In response to these challenges companies are extremely focusing on the streamlined strategic alliances with their competitors. The usually assumptions about the strategic alliance is companies cooperate with one competitor and compete with other, and it can be defined as a single line alliance where the element of cooperation is prominent. The extended form of single line alliance can be defined as a multiple alliance or network alliance where firms cooperate in some activities and at the same time compete in other activities. The element of cooperation and competition is prominent in multiple alliances.

According to ABC9 when visibility of the both elements is find in any specific relation is called 'coopeation. According to ABCG1 "coopeation is the most complex and also the most advantageous relationship between competitors.

Furthermore the nature of relations between the competition and cooperation is based on different shapes. For instance, On the one hand it consists of merely cooperative activities and on the other hand it consists of merely competitive activities. Further, these coopeation relations can be divide into three different categories for instance, cooperation dominated relationship, in which partners mainly focuses on the cooperative activities rather than competitive activities. Second is equal relationship, in which both Partners will focuses on equality and on the last is Competition dominated relationship, in which partners mainly focuses on competitive activities rather than cooperative activities.

According to ABC firm's activities in coopetitive relation can be separate by the structure of the value chain or the magnitude of the firm. By functional these activities can be divided into two separate categories such as business units and product area. The main objective of this classification is the identification of those areas where competitor compete each other.

In addition as concerning to the managerial issues, according to ABC4 define the first challenge for the any alliance manager is to find out the complexity of the network and setting the strategic vision of the organization. As following the word "complexity of networks" abc4 define different approaches to analyze the complexity of networks which can further distinguished into four levels.

For instance, "INDUSTRIES AS NETWORKS" which define a firm behavior in the network alliances and explain the key elements with in the existing network such as actors, resources, and further explain how management operates a firm in the same environment. Moreover (xyz) gives extensive comments on the network visioning capability, such as network vision capability is an essential strategic approach in the network alliance which refers management's skills and competencies to create the valid views of networks and their potential evolution, also it is closely related to the organizational learning construct and helps to systematically generate the information relevant to its current and future operations. Although this capability is refers to manage the supplier and customer portfolios in analytical aspects such as creating and using databases and conducting supplier and customer evaluation and organizational aspects such as to develop organisational solutions for handle the exchange relationships.

In addition, the second approach is "MANAGING FOCAL NETS AND NETWORK POSITION" is describes the environmental context of firm which consists of those actors that are within its network horizon and relevant to the management perceives. For instance how a firm relates to its environment and what strategies firm will adopt to maintain its position with in network and how coopetition will influence on the firm strategy. Furthermore, ABC gives an extensive comment and says it is important for managers to consider different network collaboration strategies and understand the dynamics of collaborations and competition. Further managers need to consider that how a partner can affect on the company or overall network performance.

Furthermore, third level is "MANAGING RELATIONSHIP" is explain the management of internal resources for instance how firm exchange the resources, capabilities and activities and also relationship. (Journal ABC) defines this approach as a network sensing, on which firms managing the existing relationship and continuously seek new partners, opportunities with those who provide unique complementary resources which provide an opportunity for competitive advantage.

Moreover, the last approach which can be describe as "MANAGING EXCHANGE RELATIONSHIP" is focusing on the analysis of the firm interaction with network, in which management mainly focus on the exchange of elements and the basic relevant factors which influencing the business interaction. As relating to word "exchange of elements", in depth it can be define as exchange of strategies .(ABC) suggest during the exchange process when managers exchange strategies, managers need to focus on the interdependency approach which can be related to the companies sales, technology, supplier information, company development and access to other companies in the surrounding networks. Apart from this manager also need to discuss those issues which might create problems on the second stage of alliance such as company is responsible for its own analysis, development and the implementation of its own strategy which is based on its own resources,

In addition as relating to e word "Managing Network" (Reflik, 2002) define two different dimension of network alliance for instance, the first is a organisational prospective and second is a managerial prospective. On the firm prospective, network alliance is a product of strategic decision making process which consist of formation, operation, achieve economic scale, reduce risk and cost, access internal and external market develop new technology and products, acquire resources depends on the firm weakness in any value chain activities and competencies in R&D, production, or marketing,

Further from the managerial prospective, it can be divided into further two steps for instance first on the domestic level and second on the global level alliance. On the domestic level, the concerning issue for managers, is difficult to find out the partner firm strategically intention and cooperation experience, which gives a good indication of its future behavior and on the global level including the above issues and also the different geographical distance, cross culture issues, economical issues, and so on.

As a consequence, to understand the problems and issues regarding the domestic and Global level, (Reflik, 2002) suggest a circular model which provides the practical insights into different alliance formation and consist the elements of need, partner selection, structure choice, control and evaluation, and adjustment. Although, following the circular model It is easy to take the necessary action, such as on the early stage manager should balance the resources, needs and desire of the partner firm and on the later stage manager should be strategic sponsor focus on the firm strategic direction and also visionary which promote alliance and should be a facilitator and able to link business area and its resource. Also on the interpersonal level manager should manage relationship with subordinate not only in the firm level but also with other alliance partner's firm's managers.

Building a core competitive position in network it requires a long term commitments and process with back hand support of contingency plan. And also it is important to understand the changes in network and considers different network collaboration strategies and understands the dynamics of collaborations and competition.

According to ABC rapidly change in political, economical, technological and social environment, as regarding to all these changes in business network, building a core competencies requires a long term commitments and process with back hand support of contingency plan and ability to manage the change and agility approach for managing or terminating alliance.

(Business Relationships and Networks)


Global Business Alliances: Theory and Practice

by Culpan, Refik.

Publication: Westport, Conn. Praeger, 2002.

Managing Business Relationships

Publication: Chichester, West Sussex, Hoboken, NJ John Wiley & Sons, Ltd. (UK), 2003.

Joseph M. Bonner, Daekwan Kim and S. Tamer Cavusgi

Journal of Business Research

Volume 58, Issue 10, October 2005, Pages 1371-1380

Self-perceived strategic network identity and its effects on market performance in alliance relationships