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Business Alliances Discussion
In the international business, companies seek alliances as a way of setting strategic positions that benefit them for primary and secondary gains. To make sense of these strategic alliances, proper management that understands the dynamics of local and global business is required (Isoraite 40). A good example of strategic alliances that have successfully made sense is between Starbucks Coffee and the United Airlines. The alliance allows United Airlines to serve branded Starbucks coffee to passengers on board. The alliance is successful because each of the companies is mutually gaining from the venture.
On the other hand, some business alliances do not make sense because of their failure to operate and benefit the partners in the business. A good example of such an alliance is between Apple Inc and IBM to start a software company, Talligent. The main cause of failure of the alliance was lack of mutuality in the business, as the two companies had not sincere commitment to the success of the venture. Apple’s focus on consumer products did not marry closely with IBM’s focus on commercial and corporate products.
The two alliances are important lessons for current managers because they provide the basis of evaluating the need and the success of strategic alliances. In global management, managers should seek alliances that promote mutual gains and strategic advantages. At the same time, the manager should avoid alliances that do not promote the primary or secondary focus of the organization. At the same time, the manager should not seek international expansion at the expense of local growth (Isoraite 42). Therefore, strategic alliances should be established to take advantage of the local growth to expand internationally. For instance, the alliance between Starbucks Coffee and United Airlines seeks to promote the two firms both locally and globally.
Work Cited
Isoraite, Magarita. Importance of Strategic Alliances in Company’s Activity. Management Journal, 2009, No. 1(5), p. 39–46