. What are the different types of strategic alliances, and under what circumstances each alliance type is preferred? 2. What are some factors that must be considered before a company considers expanding internationally? 3. Chapter 10 describes how companies like Netflix, Redbox, Build-A-Bear Workshop, Amazon and others have used innovation to disrupt markets and gain competitive advantage. What are some other examples of companies that used innovation to either increase their competitive advantage, or create a new advantage to disrupt the market and compete effectively against established competitors? 4. What are four primary ways in which firms create value through strategic alliances? 5. What is a strategic alliance function? Identify at least two ways that a strategic alliance function helps a firm be more successful with its alliances. 6.Describe the concepts of local responsiveness and standardization. Determine which international strategy is best suited to each pressure and explain why. 7. What is the difference between low-end and high-end disruptive innovations? 8. What does mass customization mean? How do companies use mass customization to succeed in the market?

Q1 Strategic Alliances

The strategic alliance is strategically an agreement signed between two institutions or businesses with the aim of pooling their resources to acquire a common business goal and meet the set objectives and missions. They are typically agreed upon when every company to the agreement has some skills needed to accomplish the aim of the contract (Schilke & Goerzen, 2010). Also, when these skills are combined, they make the organizations fulfill and provide a distinct competitive advantage to both the entities. Also, the strategic alliance is significant in acquiring geographical presence; accomplish economies of scale via partnership for manufacturing of gaining access to research or technology among other considerations. The types include precompetitive alliances that are essential in vertical integration; for instance, the relationship that exists between the manufacturer and the suppliers without the businesses engaging resources in the manufacturing organization. The noncompetitive alliances are formed between organizations that operate in a similar industry but do not consider each other as competitors.  The competitive coalition is for two organizations that strategically view themselves as rivals; however, the intense competition between the two is necessary.

Q2 Factors to Consider before going International

International expansion can be quite profitable to a growing business entity; even though, this does not reflect that any business can venture into foreign markets and proceed with the company without looking into some essential considerations. Some of these factors include the standardization of goods as one will need to come up with high-quality products and services to the foreign countries (Kankaanranta & Planken, 2010). Moreover, every market has its preferred standards of quality and assurance that ought to be fulfilled with the aim of creating a firm position for the business. Another consideration is the adaptability and flexibility which are essential for any business operation; therefore, every entrepreneur ought to be open to change and adaptation when it comes to business strategies, goods, and marketing processes. Language and cultural differences are also an essential consideration since international markets require one to overcome language barriers that typically hinder business operations on a global scale. Going international also requires dedication and full commitment as it can be challenging to accomplish the task if one is not dedicated to the business.

Q3 Innovation in Competitive Advantage

Business institutions are frequently faced with the challenge of acquiring a competitive advantage over other stiff competitors; thus, gaining this particular edge typically means business must survive with the aim of staying on top of competition for others. One of the essential ingredients for staying on top is innovation as it says one has to view things from a modern perspective, broad considerations, taking risks and being flexible (Kankaanranta & Planken, 2010). Apple Inc. is one institution that uses innovation to gain a competitive advantage globally together with its brand that is recognized across the globe. The organization has several loyal consumers who are willing to spend their cash on the company’s products; hence, the company has invested in coming up with new products including the Apple car. Another organization is the Google Company that is a leader in online advertising and has several online services. The institution uses innovation including artificial intelligence and machine learning in maintaining its competitive advantage in the market.

Q4 Creating Value through Strategic Alliances

Strategic alliances typically come up with ways of creating values through the combination of strategic capabilities of two organizations that come together to operate (Schilke & Goerzen, 2010). One of the two institutions will have the production facilities while the other organization might have the distribution network essential in creating value. Through allying, organizations get something that will effectively take massive investments to construct. In electric striving companies including software, financial services and electronics are the dominant forms of alliances as they attempt on contractual partnerships that strategically offer a rapid procedure to access markets with minimal time, rigidity, and other associated issues in coming up with a separate organization with a counterparty. Therefore, there are various techniques in which value can be created by successful strategic alliances as they ought to be centered on shared values and clarity. Also, strategic partnerships can be useful if a business has a particular reliance on given goods and services.

Q5 Strategic Alliance Function

Strategic alliances enable two institutions, people, or other entities to typically work together towards achieving common or correlating objectives essential in driving the business forward and gaining marketing stability. The main ideas of the alliance are for all the members to benefit in the short-term or long-term or both and the agreements are typically formal or informal; however, every party’s responsibilities should be clear and well outlined. Also, the deal is likely to be in place over the short or long term depending on the wants and objectives of the parties engaged (Shi, Sun & Prescott, 2012). Strategic alliance function provides opportunities for the involved business to pursue the existing opportunities at a rapid rate than if the industry functioned solely. It also provides access to more knowledge and resources owned by the other involved party that is important in easing the learning curve for the smooth pursuit and relive setup time and expenses.

 

Q6 Concepts of Local Responsiveness and Standardization

Global integration is considered as the forces that make the multinational corporation exploit global resources and engages their operations on an international basis to realize economies and acquire cost reduction. More precisely, the creation of advanced technologies allows institutions to enlarge manufacture universally and meet economies of scale thus leading to more standardized products. On the other hand, local responsiveness needs the multinational corporation to come up with strategic decisions centered on the local perspective (Schilke & Goerzen, 2010). The local responsiveness is (1) the differences in consumer taste in various nations; (2) the typical characteristics of the goods system in host nations and, (3) the administrative expenses of coordinating manufacture on an international basis. The global chess is the critical strategy essential for the global integration as it utilizes the profits generated in one market to fund the operations in another. Local responsiveness requires the integration-responsive framework in providing insight into the manner in which multinational corporations compete globally.

Q7 Low-end and High-end Disruptive Innovations

In a business set up, disruptive innovation is considered as an innovation that leads to new ‘[market and value network and eventually disrupts an available market and value network, displacing the existing market-leading organizations, products, and alliances. According Yu, & Hang, (2010), the disruptive innovations are produced by outsiders and entrepreneurs, rather than the available market-leading organizations. However, there are differences between the two where the low-end disruptors typically enter the market with goods that are low-performing but highly affordable while the high-end disruptors enter the market with products that are low in affordability but high in performing. Also, the low-end entrants typically under-serve the performance requires many markets; but are good enough for the low-end that embraces affordability. On the other hand, high-end entrants that under-serve the affordability lacks many of the markets; but are cheap for the high-end that embraces performance.

Q8 Mass Customization

According to Piller, (2010), mass customization is regarded as the technique of delivering wide-market products and services that are strategically modified to fulfill given clients need. It is also a marketing and manufacturing method that brings together the flexibility and personalization of custom-made goods with the low unit costs concerned with mass production. The concept is essential as many brands and companies are adopting it in coming up with marketing techniques for goods and service lines and in the process of outlining the target audience of a given brand or business. The method provides much help, food-for-thought, and motivation to the entrepreneurs within the business environment.

 

References

Kankaanranta, A., & Planken, B. (2010). BELF competence as business knowledge of internationally operating business professionals. The Journal of Business Communication (1973), 47(4), 380-407.

Piller, F. T. (2010). Handbook of research in mass customization and personalization (Vol. 1). World scientific.

Schilke, O., & Goerzen, A. (2010). Alliance management capability: an investigation of the construct and its measurement. Journal of Management, 36(5), 1192-1219.

Shi, W., Sun, J., & Prescott, J. E. (2012). A temporal perspective of merger and acquisition and strategic alliance initiatives: Review and future direction. Journal of Management, 38(1), 164-209.

Yu, D., & Hang, C. C. (2010). A reflective review of disruptive innovation theory. International journal of management reviews, 12(4), 435-452.