To determine:
The need to carry out strategic
Introduction:
Strategic partnership comprises of an agreement or contract between two or more parties/organization under which all stakeholders agree to share resources, capital and skills in order to have a solution for an underlying problem.
Answer to Problem 1IC
It can be said that, it is difficult to manage and carry out the operation associated with a huge project that involves natural gas highway by a single company .Therefore, forming a strategic partnership will not only help in partnering the resources and technique, but will also help in addressing the issues in detail resulting in completing of the project in an efficient and effective manner.
Explanation of Solution
In this situation, clean energy fuels and Navistar international have entered into an agreement for building a natural gas highway of America. It stands significant to enter into partnership for undertaking such a huge project because it would be technically difficult for a single organization to carry out and manage the operations involved in the creation of natural gas highway. Formation of strategic alliance provides benefit to both allies and the problems related to the project can be addressed in detail.
The factor that encourages business to enter into alliance is shown below:
1. Global market access- formation of alliance helps in providing access to markets across the globe.
2. Increased revenue- Sharing resources and skills provide a chance to the allies to walk around new market for implementation of new ideas which leads to an increase in the company’s revenue. It has been stated by senior executives associated with different companies that their revenue has increased to a great extent through their alliance with other companies.
3. Capturing new customer- Every organization has an access to a limited number of customers that falls in their field of work. However, strategic alliance provides an opportunity to the company to grab customers in the markets that were previously inaccessible.
4. Exploring new areas of business- Strategic alliance provides the opportunity to the allies in exploring areas that are new for the business. The companies are able to work in new markets and increase their understanding of different type of customers. This helps in the expansion of the companies with respect to financial and physical context.
Want to see more full solutions like this?
Chapter P3 Solutions
Understanding Management (MindTap Course List)
- What happens if a corporation tries to equal the competitor's current competitive position?arrow_forwardBegin by choosing a publicly traded corporation( COCA COLA) and conduct research to find articles or academic sources that explain the resources, capabilities, and competencies of your chosen corporation. From your list of competencies, identify your chosen corporation’s core competency (ies). Suppose you have been appointed to conduct a high-level value-chain analysis of your chosen corporation. What would you say are the corporation’s primary and secondary activities? Be specific in describing how each activity adds value to the corporation and ultimately to shareholders’ wealth. Be sure to post at least 2 references in support of your explanations and conclusions.arrow_forwardColleges and universities, like all business, have strengths, weaknesses, and competitors. Who would be the competitors to online universities?arrow_forward
- Live Nation operates music venues, provides management services to music artists, and promotes more than 40,000 shows and 100 festivals in 40 countries annually. The company acquired House of Blues, merged with Ticketmaster, and has also acquired concert and festival promoters in the United States, Australia, and Great Britain. How has the company used horizontal mergers and acquisitions to strengthen its competitive position? Are these moves primarily offensive or defensive? Has either Live Nation or Ticketmaster achieved any type of advantage based on the timing of its strategic moves?arrow_forwardCompetitive companies are often measured by how they compete in their industry. Therefore, analyzing gross profits helps substantiate (or refute) managers' claims of good financial performance. Gross profit signals the health of a company and its closest competitors. A company that creates a superior brand and charges higher prices than its competitors generates higher gross profit. In this discussion question, you will apply theory from your past courses in management and finance: Describe two competitive companies with similar gross profit figures that ended up with dramatically different net operating income. Provide details of the two companies and include both qualitative and quantitative results to support your response. Provide three factors that financial analysts need to evaluate when determining one of your chosen company's (from the previous question) ability to repay short-term versus long-term debt. Describe in details to support your response.arrow_forwardEvaluate if it is possible for a business to meet the needs of shareholders, customers, employees, suppliers and society at the same time. How can a balance of interests be achieved?arrow_forward
- What is necessary for a business to survive in the long term?arrow_forwardHow can a corporation leverage the Internet to establish a virtual enterprise or attain a competitive advantage?arrow_forwardDiscuss the problems inherent in developing a cooperative alliance in order to enhance competitive advantage while incurring the risk of developing a new competitor. How does each advantage in Dunning’s eclectic theory specifically affect a firm’s decision regarding entry mode?arrow_forward
- Considering the various types of business entities, how would you convince a company’s founder that becoming a B corporation or a public benefit corporation is a better way to do business? Provide some examples of companies that have chosen this type of corporate entity. Additionally, discuss how you think that becoming a B Corporation or a public benefit corporation can help address social and environmental problems while still attracting consumers and investors?arrow_forwardA business group with a high level of unrelated diversification has its businesses as separately listed and legal entities. The parent company however is not a listed organization. Which type of multi-business structure is this? Cooperative form SBU form Competitive form None of thesearrow_forwardDo you agree with the view that, if they are established and managed carefully, strong alliances can provide all the benefits of an acquisition or merger without most of the drawbacks? Explain your answer.arrow_forward
Understanding Management (MindTap Course List)ManagementISBN:9781305502215Author:Richard L. Daft, Dorothy MarcicPublisher:Cengage Learning