How A Company Can Evaluate Success of a Strategic Alliance

Strategic Alliance

The Middle Eastern companies should measure success by focusing on the profitability of the venture in the end especially when the objective of the alliance is to increase the company’s profit margin (Albers et al., 2013). The company can focus on the various benefits of forming an alliance that include the increase in profits by being associated with popular brands that are produced by its partner or partners in the alliance. Another successful measure is the efficiency of operations by the knowledge brought by the other company. As such, the company has more efficient and quick operations that are being carried out quickly hence increasing productivity (Fawcet, 2013). The speed of the operation is, therefore, faster than before. Also, the company should focus on the record of accomplishment of the other company to ensure that it is a successful business, and it can bring on board a competitive advantage that will help the business expand and increase its profitability in the local market.

Furthermore, governance structures in place are strategic and better placed to handle the various business processes and that are formal in nature help in making the alliance succeed (Lasserre, 2015). Another measure of success is the access to a new market by the strategic alliance that was not possible before. Moreover, success is enhanced when the company’s ability to tap into new markets is increased thus benefit the firm regarding market share and promotion and the eventual profitable in those markets. The local firm it eh alliance benefits greatly from the input of the other company to ensure that it can tap into newer markets and expand its operations.

The criteria that can be used to measure the success of a strategic alliance and it should be critical to the advancement of a core business objective or goal. Secondly, the alliance is critical to the maintenance and development another initiator of either competitive advantage or core competency (looney, 2014). Another criterion focusses on how such an alliance hinders a threat that is competitive to the business. Fourthly, it is evaluated on the ability to alleviate a significant and potential risk to the business. Fifthly, the alliance is examined based on maintaining or creating calculated choices that will contribute greatly to the success of the company.

The criteria are very relevant to different cultures, different geographical regions, and cultures across the world. Not all places have the same practices, especially in business (Spiegel, 2015). The criteria provide a broad base on which alliances are measured to determine whether they are strategic. Cultures are also an important part of the formation of alliances, as the company has to understand the culture in a specific country, especially when setting its goals to achieve the desired result.

Developed countries have multinational that have many branches globally, and such companies may form local or international alliances that are strategic. The criteria measure the alliances against the goals that are to be met. If the objectives or goals are not met then, the alliance is not successful, and both parties should disembark and look for other ventures. It is also vital to focus on the various risks in the market that are a threat to the company’s smooth operations and whether the alliance will reduce it or not.  Moreover, the company looks at an alliance that will enable the blockage of various threats to the business as stated in the criteria. The criteria help in determining whether the company will gain by the development of a competitive advantage or whether the company will have its competitive advantage secured.

Future operations are important in that though at present it may not seem strategic to form an alliance with it can prove a success to the company in future. Therefore, a current objective may not be met but the nature of the alliance may prove critical in the coming days. Such a criterion help the company to look at the future while still in the present and see various opportunities, goals and objectives that it will be able to achieve though at present the situations may not be showing a successful venture. One criterion is based on the alleviation of risks, which is important to any business especially in ensuring that such a business is not hurt financially or in a way that can lead the stop in its operations (Elmuti et al., 2012). A company in such a case is judged based on the significant risk that is associated with a certain business goal and the extent of the risk that determine whether it is strategic.

Strategic alliances are therefore important for the businesses that want to venture into new markets or benefits from foreign companies that have more knowledge and professionalism, and that can boost The Company’s performance. As such, it is important to gauge an alliance on the various set objectives and other criteria mentioned above to ensure that the intended strategic alliance is in place for the benefit of both companies. Strategic alliances to be in force should, therefore, offer mutual benefit for both companies.


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