A business may enter a strategic partnership to extend its product lines into a new market or build a competitive advantage. The agreement helps two organizations to accomplish a shared purpose that is advantageous to both. One of the major companies which adopted this strategy is Airborne leading to its success in sales and performance. Besides, the study also utilized the strategic alliance policies ensuring its market share increase in a significant manner. This study seeks to investigate the major advantages and disadvantages of strategic alliances in expanding the market share of the company.
A strategic partnership enables a company to achieve a competitive advantage by accessing a partner’s resources including markets, technology, money, and people as witnessed in Airborne Company. Joining others offers additional capital and capacity, allowing companies to develop and evolve more quickly and efficiently. This is mainly because the company may join with other competitors to increase its market competitiveness. Airborne company also benefited from partnerships by reducing production costs and rapidly evolving and disseminating new technologies. Strategic partnerships also promote product releases and rapidly resolve legal and economic obstacles. This is the fastest and most successful technique to achieve growth goals in this age of rapid technological changes with alliance-building global markets. Organizations must ensure that the alliance’s goals are consistent and matched with current companies, to pass their experience to the Alliance, which was the essential market share strategy used by Airborne. A properly organized strategic partnership will offer many possibilities and maximize the growth potential of the parties. In addition, during difficult economic times, it may provide an alternative source of resources.
Companies can increase revenues by allying with others, which otherwise is incredibly difficult for businesses. companies can expand their business. Moreover, the competitive advantage of the enterprise is reasonably covered for a relatively long time when the market cycle is sluggish in nature, due to numerous external and internal factors. The company itself struggles to present the new and latest target market deals as Airborne Company has shown. In this scenario, strategic alliances can be formed to explore the new and limited markets and to achieve stability in the market through alliance sharing and competence. The company releases a new product line every couple of years in regular intervals during its normal business cycle and can either not retain its leadership and its leading role as a market leader. Strategic alliances, as conceived, have access to complementary resources, achieve economies of scale, overcome other competing firms, and pool resources for ventures that require many funds and investment in capital.
However, while strategic alliances tend to be more influential, the strategy also has some disadvantages for Airborne Company’s well-being as demonstrated by the company. Because of the lack of bonds between the undertakings concerned, businesses are likely to have poor contact. Poor communication can lead to poor decisions and loss of the reputation and business activities of the company. In addition, all firms are accountable in the strategic partnership and do not have any liability for the actions of others, resulting in poor management throughout the business alliance. Companies participating in the coalition must not have identical advantages. Often one organization has more advantages than the other. Some companies are unable to genuinely adhere to the contract, which leads to a loss of profit for other companies.
There were of course, obstacles built by strategic alliances. One of the biggest disadvantages is that a partner who runs all of his company internally has to now rely on a second partner. In contrast to one corporation alone any entity that agrees on a strategic partnership would be costly to take advantage of any advantages. Strategic alliances have risk especially if not financially equivalent, of themselves. This involves loss of organizational control and privacy of confidential information and technologies. A series of alliances may entail a conflict or the perceived decrease of corporate culture. The partners may also deprive themselves with their strategic partner’s rivals of potential business opportunities.
