International Business Alliance (based on the Business Strategy Game) - Essay Example

Didas’s Alliance Proposal to Kachilles Heel Proposed Governance Management structure at both partners’ will need specialized modification that will factor in the alliance management needs. Strengthening the management teams’ attention will require formulation of a collaboration committee in the initial stages of the alliance, bearing the management oversight mandate. The initial stage of carrying the appropriate alliance management design will therefore include the appointment of the alliance committee for further managerial design negotiations. A managerial design structure will be negotiated and agreed among the committee representatives. To ensure that the highest form of commitment and cooperation is obtained from both partner firms, the highest level of management and administration will be brought on board. Management design at the two firms will determine the final structure adopted by the alliance (Bamford, Gomes-Casseres, Robinson 2003, p10) Popularity of the alliance among the employees is very important in the creation of a solidly committed team in the implementation. In light of the importance of the management gesture, the involvement of the board of directors in the agreed structure will be necessitated (Gist, 1995, p2). This structure will incorporate two board members, five senior managers including the finance managers and the elected committee representatives. Improvement will be the main focus of the alliance hence a proposal for appointment of the most versatile manager-leaders will be forwarded at first hand. The flexibility currently enjoyed by the management teams at Didas and Kachilles Heel will be streamlined and facilitated to reach a compromise that will benefit both firms. The benefits of alliance constellation will be accurately identified and closely monitored, as far as commitment is concerned as illustrated in Figure 1 (Lekhyanada et al, n.d, p.3). Proposed Scope The main operations target will guide the scope at which the Didas’s-Kachilles Heel business alliance will be set. The role of the alliance will define the scope of the alliance, as informed by the set goals that each partners have. In collaboration with the team comprised of the board members and the managers, the collaboration committee will screen the unique sets of opportunities and threats that the two parties have. Targets will then be set in line with each of the partner’s objectives and growth prospects (Ohtsubo, 2008, p5). From our side of the alliance, we will make certain scope areas of emphasis such as internet and private-label segment that Kachilles Heel is particularly excellently performing in. At Didas, growth targets have already been set to hit the 80 percent mark in three years time. For instance, increasing our capacity through the guidance of Kachilles Heel, the alliance will definitely reap the benefits of this emerging strength area that will tap the social networks for market positioning. The initial scope setting stage has been set by the identification of Kachilles Heel as the most suitable partner in the alliance, having related well with our strategies and objectives. The arc of alliance strategy will form the basis of our scope establishment. For purposes of balancing the contributions between the two firms, joint equity venturing will be performed on agreed potential and existing quantifiable interface goodwill (Lekhyanada et al, n.d, p.3). As included in Figure 1, managing an alliance heavily relies on the capacity achieved by the partners in order for the design and management procedures to be formulated. Each of the other factors at Didas and Kachilles Heel will get a lot of impact from the targeted goals as well as current opportunities (Bamford, Gomes-Casseres, Robinson 2003, p10). . Proposed Interface The proposed alliance interface will be based on an agreeable market presence identity and brand existence potential, to create a balance in the most economical business engagement between the parties (Gomes-Casseres, 1997, p.54). The designed interface will first factor in the structural designs in use at the two partner firms, as highlighted in the management segment, before engaging in operational interface intricacies (Bamford, Gomes-Casseres, Robinson 2003, p164). Having been in the market for some time, a proposal is made that each firm initially uses its brand name for the products that it has been able to post advantageous results. For instance, in areas where Didas has had tremendous results such as in wholesale, it should be granted that line of operation with its brand name while Kachilles Heel will continue with technology and internet line of operation for the alliance. It will be important that the alliance capability elements of initial negotiations be factored in to cater for interface needs. The best design and management positioning will be facilitated by the identification of the capabilities which will assist in making the most suitable interface. Expanded capacity in the future will facilitate joint product and operation expansion in an attempt to maximize the benefits of working as an alliance. An alliance logo that will appear on all products by the two firms will be incorporated in the interface launching requirements for appropriate market positioning. Regarding management contributions, an equal number of individuals will initially be factored in, using the internal appraisal system, to enhance the firms’ relationship in the business venture. In terms of facilities, an agreement will be entered into on appropriate quantifiable venture ratios that will improve performance of the individual partners. Proposed Management Procedures A new business strategy that is unique and reminiscent of the new ambitious plan envisioned under the alliance will be formulated prior to implementation of joint operations. Both firms agree that there are unique sets of opportunities, strengths, capacity and challenges that will need procedural tackling in order to veer off negative results while maximizing on the unique opportunities. The initial management procedures will include alliance familiarization among the employees and rallying them behind the project for cooperation. Without cooperation from all quarters of the firm, it will be difficult for the alliance to kick off with the required gusto. Alternatively, the management will lay out the operation timeline for the various implementation phases as guided by the available funds and facilities capacity. In addition, it will be the duty of the management to supervise the implementation of the alliance, offering the required guidance and directions. Perhaps the most important approach will be a constant emphasis on improvement to sustain the alliance which will be terminated without the delivery of results. It will also be the managements’ role to formulate a review and alliance appraisal program and formulae. Performance Review System For purposes of surveillance and improvement assurance, each of the firm’s management will have a separate monthly performance review procedure, and a quarterly joint review. Performance parameters that the separate management teams will deal with will include an emphasis of the specialized area while keeping an eye on the improvement progress for the areas they need to learn on. For incorporation of independence and challenge, inter-partner appraisals will be facilitated. The results will be communicated to the stakeholders through the board members involved in the alliance management. A separate constant review procedure will be conducted as an internal control measure, to observe detrimental results at the earliest time possible and avert losses for the partners. Strategy review will be incorporated on a regular basis due to the competitive nature of the industry, in order to launch the best competitive advantage at all operation periods. Due to the dynamic nature of business opportunities that firms have on different periods of operation, it will be important that a review of the individual firm’s opportunities, threats and strengths be carried out on a regular basis. In light of the review results, the management teams will be in position to quantify the benefits of stating in the alliance or going separately on mutual grounds. This is because managerial decision making that factors in cost-benefit analysis of operations will always identify an advantageous operation decision and its disadvantageous alternative must be avoided at all managerial perspectives including stopping operations (Bamford, Gomes-Casseres, Robinson 2003, p149). References Bamford, J. D., Gomes-Casseres, B. & Robinson, M. S. (2003) Mastering alliance strategy: a comprehensive guide to design, management and organization. Hoboken, NJ: John Wiley and Sons Boyd, B. & Dunning, J. H. (2003) Alliance capitalism and corporate management. 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(2008) Panasonic and SANYO Agree to Capital and Business Alliance, [online] Available from: [accessed 29 May 2011] Reuer, J. J. (2004) Strategic alliances: theory and evidence. Oxford, UK: Oxford University Press. Read More