STRATEGIC ALLIANCES IN GLOBAL MARKETS

SCUOLA DI DOTTORATO

UNIVERSIT? DEGLI STUDI DI MILANO-BICOCCA

Department of Economics, Management and Statistics Phd program: Marketing and Business Management Cycle: XXIX

STRATEGIC ALLIANCES IN GLOBAL MARKETS

Candidate: Margherita Russo Registration number: 759771

Tutor: Silvio M. Brondoni Coordinator: Silvio M. Brondoni

Academic Year 2016-2017

Declaration of originality The work referred to in the thesis has not been submitted in support of an application for another degree or qualification of this or any other University or other institute of learning. I declare that this thesis embodies the results of my own work. Following normal academic conventions, I have made due acknowledgement of the work of others. Copyright statement Copyright in the text of this thesis rests with the author. Copies (by any process) either in full, or of extracts, may be made only in accordance with instructions given by the author.

? Margherita Russo 2016 All rights reserved. However, this work may be reproduced, without authorization, under the conditions for Fair Dealing. Therefore, limited reproduction of this work for the purposes of

private study, research, criticism, review and news reporting is likely to be in accordance with the law, particularly if cited appropriately.

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TABLE OF CONTENTS

INTRODUCTION

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CHAPTER 1: STRATEGIC ALLIANCES IN GLOBAL MARKETS

1.1 Overview of strategic alliances in global markets

5

1.2. Strategic Alliances vs. M&A

6

1.3. Strategic alliances in Western vs. Eastern culture

10

1.4. Alliance paradox

13

1.5. Research purposes

15

CHAPTER 2: GLOBAL STRATEGIC ALLIANCES: BENEFITS & FAILURE

2.1. Global Strategic Alliances

17

2.2. Types of Strategic Alliances

20

2.3. The strategic importance of alliances: "Alliance benefits"

23

2.3.1. Mutual Alliance benefits: "Alliance between Toyota & PSA"

26

2.4. Alliance Failure: "Costs & risks in cooperative strategies"

29

2.4.1. Alliance Failure between Daimler-Benz and Chrysler

37

2.4.2. Alliance Failure between Renault & Volvo

43

CHAPTER 3: ALLIANCE SUCCESS FACTORS

3.1. The choice of Alliance governance

48

3.2. Knowledge sharing

51

3.3. Developing of Social capital

53

3.4. Complementary & Idiosyncratic resources

55

3.5. Alliance management capabilities

59

3.6. Market Driven Management: "Alliance orientation from Market orientation"

61

3.7. Conclusion

64

CHAPTER 4: ALLIANCE SUCCESS FACTORS IN ALLIANCE LIFECYCLE

4.1. Alliance lifecycle

66

4.2. Success factors in Alliance Formation Phase

67

4.2.1. Partner selection

67

4.2.2. Choice of appropriate alliance governance

72

4.3. Success factors in Operational Phase

74

4.3.1. Coordination

75

4.3.2. Trust and Commitment

76

4.3.3. Control

80

4.3.4. Communication

81

4.3.5. Conflicts

83

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4.4. Success factors in Evaluation Phase

86

4.4.1. Alliance performance

86

4.4.2. Further Alliance development

91

4.5. Alliance success between "Ford and Mazda"

93

4.6. Conclusion

99

CHAPTER 5: "ALLIANCE MANAGEMENT CAPABILTIES"

5.1. Alliance management capabilities

100

5.2. Alliance management capabilities development

103

5.2.1. Alliance experience

105

5.2.2. A dedicated alliance function

106

5.2.3. Alliance learning process

110

5.3. Conclusion

115

CONCLUSION

118

BIBLIOGRAFY

124

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INTRODUCTION

In the last two decades, strategic alliances became important sources of growth and competitive advantage thanks to several benefits that they provide such as accessing new and critical resources and capabilities, improving competitive position, effective and rapid entering in new the markets (Kogut, 1991; Ahuja, 2000, Kale & Singh, 2009). Strategic alliance has been seen as a response to market globalization and increasing uncertainty and complexity of the economic environment. Peter Drucker (1996) states that changes in corporate culture and in the way of doing business, accelerate growth of relationships based not on the ownership, but on partnership. Firms need to find innovative answers for adapting their activities to the economic environment changes, where time and dynamic market-space are now considered as critical competitive factors (Brondoni 2005). Globalization has deeply changes the role of strategic alliances; it has led collaborative network logic between global firms. Global markets, characterized by hyper-competition, lead firms to adopt a "Market Driven Management" philosophy with a strong market orientation and a vision of competition based on collaborative network (Brondoni, 2010). In global markets, the fall of many borders, the intangible elements that outweigh the tangible one and the time that becomes a competitive factor, it develops a new system of relationships; in fact competition is now between alliance networks and no anymore between individual firms (Brondoni, 2010). Collaboration between firms is realized by the creation of specific information channels and flows inside the network (Brondoni, 2010). No firms can compete in the marketplace, as in the past, only with own its resources, knowledge and skills; global economy requires structured, widespread and highly interconnected organizations called network. These complex structures favor the management skills and relationships with co-makers and external partners (Brondoni, 2008). Indeed, in situations of highly-intensive competition, the setting up of lines of cooperation represents typical strategic behavior by firms with a long-term view and global market vision. Traditional strategies, focused on merger and acquisition for implementing growth and diversification, have been place by variety forms of partnership (Bleeke & Ernst 1995). Global strategic alliances allow firms expand into global markets more easily, leveraging their core competencies and, moreover, acquiring from their partners knowledge about the local markets (Hitt et al., 2005).

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