Cooperative Strategies and Global Strategic Partnership

 Globalization and rapid developments in technology has introduced tremendous competitive pressures on business around the world. Relationships in the form of alliances, mergers, acquisitions and global strategic partnerships are generally the means by which businesses have achieved their strategic objectives of business growth.

In this era the business game is being played by gigantic multinational corporations. Global business arena is like a jungle where the lion plays the dominant role in its environment. Multinational corporations in order to play a dominant role and lead in the global arena they pursue cooperative strategies in order to remain competent and survive in this fast changing environment. Recently Microsoft and Yahoo announced such strategy for cooperation in order to lead in the field of internet software technology.

The phrases collaborative agreements, strategic alliances, strategic international alliances, and global strategic partnerships (GSPs) are frequently used to refer to linkages between companies to jointly pursue a common goal. Global strategic partnerships or alliances are the most popular choice of the relationship in this economic environment to grow and survive. Relationship, Alliance, and partnership can be defined as “When two or more parties agree to work together for mutual benefit to meet a critical business need”.

The following six basic factors that are deemed to have a significant impact on the success of GSPs:

1.      Mission: Successful GSPs creatge win-win situations, in which participants pursue objectives on the basis of mutual need or advantage.

2.      Strategy: A company may establish separate GSPs with different partners.

3.      Governance: Discussion and consensus must be the norms.

4.      Culture: Personal chemistry is important, as it successful development of a shared set of values.

5.      Organization: Innovative structures involve different type of decision making.

6.      Management: GSPs invariably involve a different type of decision making.

Such GSPs pursued between Intel and Nokia. The two companies actually agreed to collaborate because of the ever-increasing trends in the world of telecommunications. As far as the recent trend is concerned, the manufacturers and the service providers are actually looking for a way to merge and consolidate the technologies so that the technological advances remain within affordable limits of the general mass.

An alliance is not like a marriage. There may be no formal contract. There is no buying and selling of equity. There are few, if any, rigidly binding provisions. It is a loose evolving kind relationship. Sure, there are guidelines and expectations, but no one expects a precise, measured return on initial commitment. Both partners bring to an alliance a faith that will be stronger together than they would be separately. Both believe that each has unique skills and functional abilities the other likes. And both have to work diligently over time to make the union successful.

If we look around the world, we will identify many strategic alliances or partnerships between national governments, multinational corporations, unions and societies. Such strategic alliances/partnerships have as dominant scope the profit and leadership in the global arena. Keiretsu are essentially cartels that have the Japanese government’s blessing. Always the strategic scope is the same: How to be a leader in the global arena.

“If you think you can go it alone in today’s global economy, you are highly mistakes”.