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Q3) What are the possible causes of alliance failures?

Are the causes case-specific or are they faced in


all strategic partnerships?

Alliances may fail due to poor management of essential partnerships. Even though BP had maintained
various other relationships successfully, building of a successful alliance with Rosneft failed due to lack
of proper management of the alliance with Alpha Access.

Alliances fail for many reasons such as: relationship dynamics, cultural clashes, lack of trust,
lack of coordination between teams and differences in operating procedures and attitudes
among partners.

The reasons for the failure of the BP-Rosneft alliance are listed below:

1. Poor alliance management/ Lack of due diligence.

2. Lack of communication

3. Poor management

4. Cultural differences

5. Lack of competitiveness

In my opinion the causes are case specific as all strategic alliances go through different issues eg cisco
and motorols alliance failed as the companies were blinded by ambitionand believed in an industry that
never took really took off. It’s easy to fall in love with an idea of creating value. However, it’s essential to
consistently consider the prospects of the alliance.

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