Case Study Alliance Formation

1.
How can the resource-based view of the firm help us understand why firms
develop and use cooperative strategies such as strategic alliances and joint
ventures?
The resource-based view of the organization considers that it is the resources which
make a company prevalent to others at the commercial center. It is the predominant
resources which the companies won which give them with the competitive advantage at
the commercial center since of this view that the companies make and actualize
cooperative methodologies like strategic alliance. Such procedures empower the
companies to pool their resources so that their resources increment, and they can beat
the other companies at the commercial center since of their resources.
Subsequently both these companies are pooling their resources for making a
competitive advantage at the commercial center.
Strategic alliance takes place when companies need to rapidly pick up a modern
region of mastery or get to modern innovation of markets. Firms enter into
a strategic alliance with particular characterized objectives. Joint ventures are done when
two companies chooses to contribute stores in making a third, mutually possessed
company, which is known as mutually claimed backup. The cooperative makes a
difference firms to get the resources, information and reserves from both of
its accomplices. The main objective of firms in entering into key organization together is
to bring complementary strengths to the table that will result in a competitive advantage
for the firms.
Besides that, both the firms can advantage from evaluate to new or undiscovered
markets, risk sharing, and economies of scale and shared innovation.
The agreeable procedure joint ventures similarly plays a critical part for firms
to outflank their competitors. The procedure enables trade development without
borrowing reserves or looking for offer assistance from exterior financial specialists.
Either of the firm has the correct to utilize joint venture partner’s customer database
to advertise the item to the existing clients. The advantage is for the most
part accomplished when two or more firms pool their resources together and
minimize effectiveness on the premise of project’s needs.
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2. What is the relationship between the core competencies a firm possesses, the core
competencies the firm feels it needs, and decisions to form cooperative strategies?
The relationship between the core competencies a firm possesses, the core
competencies the firm feels it needs and decisions to form cooperative strategies is the
companies have the potential to provide opportunities to enter various market and the
business strategies cannot the imitate easily. It can let the business that cooperate
become unique and difficult to imitate by competitors. The core competencies of the
company (teamwork, business skills and etc.) will make them to make the own decision
making and it will form the cooperation strategy include business-level cooperation
strategies.
The main motivation is to improve the company’s performance without using a

single product market. In addition, it will gain access to restricted markets and accelerate
the development of new products and services. For example, the alliance was formed by
Renault Company (French-based) and Nissan Company (Japan-based). When the
alliance was formed, each firm took an ownership stake in the other. This corporate-level
synergistic alliance has developed three values to guide the relationship between the two
firms which are trust, respect and transparency among the companies. Largely due to
these established principles, the Renault- Nissan alliance is a recognized success. From
that, the relationship between them is it will make joint venture among the company and
development among the products and services of the company.
3. What does it mean to say that the partners of an alliance have “complementary
assets”? What complementary assets do Renault and Nissan share?
The partners of an alliance have ‘complementary assets’ mean that the

organization have enough of market share, and capital in investment to compete with
market power where the cooperation establishes the strategic alliances and joint ventures
to meet the need of strategic. The total value of economic has added in with
collaboration of French and Japan based due to the business enters the alliance with
moderate of volume for the mass market in 1990s era and started go beyond within the
same or related of international automobile industry.
Furthermore, with the combination the Nissan is strong at Asia while the Renault
is strong at Europe area, the success of alliance bring Both Renault and Nissan are
capable to develop the other production in Latin America areas which is not
independently obtained in order to share the complementary assets. For instance,
Renault own a 43.3 percent interest in Nissan and Nissan owns a 15 percent of stake in
Renault has motivate the CEO, Carlos Ghosn to serves for both companies. The value
that the firms practice like trust, respect and transparency guide the two partners of
Renault and Nissan into a corporate-level synergistic alliance successfully.
4. What are the risks associated with the corporate-level strategic alliance between
Renault and Nissan? What have these firms done to mitigate these risks?
The managing of two distinct cultures is one of the key difficulties posed by the
Nissan-Renault collaboration. While Renault's approach was favoured by Western
strategic orientation, Nissan was influenced by corporate and national culture.
Employees from both firms were able to grasp each other's cultural backgrounds and as
a result, appreciate their colleagues' identities as well as their ideals. As a result, Ghosn
established cross-cultural training programmes for around 1500 Renault employees to
learn about Japanese culture and 400 Nissan employees to learn about French culture. It
was a positive first step toward forming a successful partnership of two diverse
civilizations.
Furthermore, Nissan had an issue with surplus capacity, which was predicated on
an unwritten contract between Japanese automakers and their employees. Ghosn broke
this tradition by closing five plants and laying off 21,000 workers. He also assumed
responsibility for the intimate network of links that exist between automakers and their
suppliers, partnerships that are characterized by a special Japanese word, keiretsu. Also,
as a result of this issue, he hired additional engineers into the Nissan organization, and
he chose to make English the company's formal language in order to deal with the
multiplicity of languages spoken. Furthermore, in Japanese culture, a youthful employee
cannot be the boss of a colleague who is older in terms of age and seniority. However,
the ECO's new promotion system, which was implemented to begin reforming the
company's management process, was focused on performance and efficiency rather than
employees' age.
5. Is it possible that some of the firms mentioned in this Case (e.g., Renault, Nissan,
Mazda, PeugeotCitroen, and Opel-Vauxhall) might form a network cooperative
strategy? If so, what conditions might influence a decision by these firms to form
this particular type of strategy?
Like the ones mentioned in this mini case, it is possible for firms to form
network cooperative strategies. It can happen because firms already involved in
networks gain information and knowledge from multiple sources. For example, the
firms can use these heterogeneous knowledge sets to produce more and be more
innovative. These conditions might influence the decision to form those strategies.
There is another condition that can influence a decision by these firms, such as
a strategic alliance. A strategic alliance is a cooperative arrangement between two or
more organizations that do not involve the creation of a new entity. In June 2011, for
example, Twitter announced the formation of a strategic alliance with Yahoo! Japan.
The alliance involves relevant Tweets appearing within various functions offered by
Yahoo! Japan. The alliance simply involves the two firms collaborating as opposed to
creating a new entity together.
Next, condition likes colocation occurs when goods and services offered under
different brands. It means they are located relatively close to one another. Having art
galleries and theaters are clustered together in one neighbourhood in many cities, for
example. While the concept of co-opetition highlights a complex interaction that is
becoming increasingly popular in many industries, although competition and
cooperation are usually viewed as separate processes. This scenario was similar to a
research study focused on Scandinavian firms. The firm found that, in the mining
equipment industry, firms cooperated in material development, but at the same time
they competed in product development and marketing.
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1.

The main motivation is to improve the company’s performance without using a

The partners of an alliance have ‘complementary assets’ mean that the

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