Strategic Business Alliances between Canada and the Newly Industrialized Countries of Pacific Asia

By Hung, C. L. | Management International Review, October 1992 | Go to article overview

Strategic Business Alliances between Canada and the Newly Industrialized Countries of Pacific Asia


Hung, C. L., Management International Review


Introduction

A strategic business alliance (SBA) can be defined as a long term cooperative business agreement between two or more companies to pool, exchange and/or integrate specified company resources for achieving some agreed objectives. This broad definition embodies a vast array of corporate linkage arrangements ranging from almost an arm's length vendor-customer relationship to an affiliation just short of a complete merger. These include joint ventures, cross licensing, reciprocal distribution and promotion arrangements, technology swaps, information exchange agreements, collaborative research programs, sharing of complementary assets, and cooperative product development and servicing contracts.

Irrespective of the form, all SBAs must possess: (a) a business objective, (b) a long term agreement indicating a continuous relationship, (c) distinct and identifiable non-equity contributions by both parties, and (d) active participation and interaction in the management of the alliance by both parties.

Cooperation between companies in the form of joint ventures and distribution agreements have existed for many years, but today's SBAs portray something qualitatively very different. While traditional corporate linkages tend to take place in areas peripheral to the partner companies' core skills and competitive strength and are formed mostly by non-competing companies, SBAs are often formed by hither-to rivalling companies in order to enhance their respective capabilities and competitive positions in non-competing lines of operations or markets. Yet, at the same time, they may face each other as competitors in different lines of operations or markets. Notable examples are the alliances formed by General Motors and Toyota, Siemens and Philips, Canon and Kodak, Thomson and JVC, Apple and Canon, Honeywell and NEC, Texas Instruments and Hitachi, and most recently, I.B.M. and Apple, and Northern Telecom and Motorola. But apart from these alliances between industry giants, there are also thousands of alliances between companies of different sizes and strengths. While one company may enter into an alliance with another company in search for entrepreneurial capabilities and market niches, the latter may be looking to the former as a source for venture capital and research support for innovative ideas.

SBAs have grown exponentially in number in recent years, and are now a very popular instrument for global market competition. In a Survey Research International survey on 419 U.S. firms in 1990, SBAs were used by over half (51.2%) of the companies for world wide expansion. This proportion exceeded by a significant margin those of the other modes such as acquisitions (36.3%), direct exporting (34.8%), new product introduction (34.2%) and start-up (18.8%). In the 1980s, U.S. companies formed over 2,000 alliances with European companies alone (Kraar 1989).

While the proliferation of SBAs in recent years has definitely been enhanced by improved communication technology linking geographically dispersed companies, the underlying driving force is unquestionably the realization of their necessity and benefits. The world market of today is characterised by a move towards globalization, escalating capital requirements for research and development, increased sophistication of new products and rapid technological obsolescence which shortens the product life cycle. These trends are forcing companies to reexamine the feasibility and wisdom of traditional market development methods and market positioning strategies. Inevitably, they come to realize that no matter how strong and resourceful is a company, there is no way it can have competitive advantage in each and every step of the value added process in all national markets, nor can it maintain a cutting edge in all the different critical technologies required for the development, production and marketing of today's sophisticated products. There are tremendous and often prohibitive costs, risks and time required to set up new research, manufacturing and distribution facilities. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Strategic Business Alliances between Canada and the Newly Industrialized Countries of Pacific Asia
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.