Alliances and joint-ventures the way forward in Relation marketing in Zimbabwe
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The document discusses various types of strategic alliances and joint ventures, providing definitions and examples. It outlines the six markets framework for relationship marketing and applies it to MSU Zimbabwe. It then distinguishes between joint ventures and strategic alliances, providing characteristics and examples of each. The document also discusses benefits and risks of strategic alliances for universities in Zimbabwe and outlines seven common types of strategic alliances - joint ventures, outsourcing, affiliate marketing, licensing, product licensing, franchising, and R&D alliances - giving definitions and examples of each.
![1,With reference to MSU Zim apply the
six markets framework
The “six markets” was developed by Christopher, Payne and Ballantyne as an instrument for
helping managers identify strategically important stakeholders. The Customer Markets are placed
in the center of this model to emphasize the idea that „organizations can only optimize
relationships with customers if they understand and manage relationships with other relevant
stakeholders”[Payne et al., 2005, 859]. The other five markets, described below, have a
supporting role:
· referral markets (satisfied customers that become advocates of the company and
recommend it to other potential customers);
· influence markets (unions, business press, regulatory bodies, financial analysts,
competitors,the government, consumer groups etc.);
· recruitment markets (potential employees and the channels used to access them;
· supplier and alliance markets (suppliers that the company has partnership
relationshipswith, and other organizations with which the company shares capabilities
andknowledge);
· internal markets (the organization and its employees).](https://image.slidesharecdn.com/d4235769-d5dc-4a61-875e-dd443bde72e3-150114142246-conversion-gate01/85/Alliances-and-joint-ventures-the-way-forward-in-Relation-marketing-in-Zimbabwe-3-320.jpg)
Alliances and joint-ventures the way forward in Relation marketing in Zimbabwe
- 1. Alliances and joint- joint ventures The way forward in relationship marketing by written Bernard, Lucia, Chiedza and Admire
- 2. Cont...
- 3. 1,With reference to MSU Zim apply the six markets framework The “six markets” was developed by Christopher, Payne and Ballantyne as an instrument for helping managers identify strategically important stakeholders. The Customer Markets are placed in the center of this model to emphasize the idea that „organizations can only optimize relationships with customers if they understand and manage relationships with other relevant stakeholders”[Payne et al., 2005, 859]. The other five markets, described below, have a supporting role: · referral markets (satisfied customers that become advocates of the company and recommend it to other potential customers); · influence markets (unions, business press, regulatory bodies, financial analysts, competitors,the government, consumer groups etc.); · recruitment markets (potential employees and the channels used to access them; · supplier and alliance markets (suppliers that the company has partnership relationshipswith, and other organizations with which the company shares capabilities andknowledge); · internal markets (the organization and its employees).
- 5. MSU and six markets model Customers- always the primary focus ie students Referral markets eg.independent financial advisors, satisfied customers students that become advocates of the company and recommend it to other potential customers Supplier markets Win- win sitaution rather than adversarial. suppliers that the university has partnership relationships with, and other organizations with which the company shares capabilities and knowledge;
- 6. Internal markets Rationale that by treating employees as customers , levels of customer service and quality can be improved. employees as internal customers Buy in leads to motivation Influencer markets : unions, business press, regulatory bodies, financial analysts, competitors, the government, consumer groups etc.); recruitment markets Potential employees and the channels used to access them ie employment agency ,other universities
- 7. 2. Using local and global examples distinguish a joint venture from a strategic alliance(20) Joint venture is a separate business entity, it is an agreement by two or more parties to form a single entity to undertake a certain project. Each of the businesses has an equity tstake in the individual business and share revenues, expenses and profits. “Joint Ventures are agreements between parties or firms for a particular purpose or venture Participants continue as separate firms May be organized as partnership, corporation, or any other form of business Formal long-term contract of 8 to 12 years duration Examples of JV’s include: Microsoft and NBC (MSNBC); Sony-Ericsson, Nokia Siemens Networks Strategic alliances are informal or formal decisions or agreements to cooperate in some form of relationship between two or more firms Created out of uncertainty and ambiguity in nature of industries Rapid advances in technology Globalization of markets Deregulation Examples of SA’s include: Oracle and Unisys; Star Alliance in the Airline industry.
- 8. The Global Airline Industry Airline industry consolidation of 1990s From code sharing, joint marketing activities to combining operations. Examples of Alliances Star Alliance ONE world Alliance
- 9. Airlines Type of Alliance United Airlines Lufthansa Scandinavian Thai International Varig Brazilian Air Canada Air New Zealand Mexicana Star Alliance: Code sharing, joint marketing; includes up to 15 partners in 2002 Global Airline Alliances
- 10. Characteristics of joint ventures Limited scope and duration Generally involve only two firms Involve only small fraction of participants' total activities Each participant offers something of value Joint production of single products No sharing of assets/information beyond venture Need not affect competitive relationships
- 11. Characteristics of joint ventures Limited scope and duration Generally involve only two firms Involve only small fraction of participants' total activities Each participant offers something of value Joint production of single products No sharing of assets/information beyond venture Need not affect competitive relationships
- 12. Characteristics of joint ventures Characteristics of strategic alliances Limited scope and duration Generally involve only two firms Involve only small fraction of participants' total activities Each participant offers something of value Joint production of single products No sharing of assets/information beyond venture Need not affect competitive relationships Need not create new entity Contract need not be specified Relative size may be highly unequal Less clear contributions and benefits Difficult to anticipate consequences Allow firms to focus on fewer core competencies Often small resource commitments Limited time duration
- 13. Characteristics of strategic alliances Characteristics of strategic alliances Need not create new entity Contract need not be specified Relative size may be highly unequal Less clear contributions and benefits Difficult to anticipate consequences Allow firms to focus on fewer core competencies Often small resource commitments Limited time duration
- 14. Characteristics of strategic alliances cont May involve relations with competitors and complementory firms Synergistic value creation from combining different resources Learning and internalizing new knowledge and capabilities Can add more value to partnering firms by creating organizational mechanism that better aligns decision authority with decision knowledge Can add value to partnering firms through organizational flexibility Move to other alliances as attractive possibilities emerge Access to people who would not work directly for them
- 15. IBM’s Global Alliances Early Alliances: Responding to Japan IBM’s Initiatives During the 1990s: Rebuilding Competitiveness
- 16. 3.With reference to the universities in Zimbabwe discuss ant 5 benefits five risks that can be associated with strategic alliances(20) Benefits Share fixed costs Bring together skills and assets that neither institution has or can develop High cost of technology development shared Reduce costs through economies of scale or increased knowledge Increase access to new technology Inhibit competitors Enter new markets Reduce cycle time Improve research and development efforts Improve quality
- 17. Advantages/Benefits cont Risk sharing Each participant diversifies risk Reduces investment cost of entering risky new research area Realizes benefits of economies of scale, critical mass, learning curve effects sooner Knowledge acquisition — learning experience for all partners Shared technology Shared managerial skills in organization, planning, and control Augments financial or technical capabilities
- 18. Advantages benefits cont Financing — to raise capital Share investment expense Small institutions has product idea but no cash Joint venture with large company that has cash to develop product bring together complementary skills and assets that neither partner could easily develop on its own Economies of scale. Risk and cost sharing
- 19. Risks/Disadvantages: Competitors institutions get low cost route to technology and markets Inflexibility Cultural misalignments Variations in Market and customer orientation Co-ordination difficulties due to informal cooperation settings and highly costly dispute resolution. High Influence costs because of the absence of a formal hierarchy and administration within the strategic alliance.
- 20. Risks cont Inflexibility problems similar to other long-term contracts Refusal to share knowledge with counterparts in venture — institutions wants to learn as much as possible but not to convey too much Inability of universities to share control or compromise on difficult issues Implementation requires substantial commitments of managerial resources alliances do not last as long as planned About 70% are disbanded before scheduled maturity On average they do not last as long as one-half the term of years stated in agreement
- 21. Other Risks cont Lack of skills and technology swaps with equitable gains risk of opportunism by a partner difficult to transfer technology not meant to be transferred Loss of proprietary information. Management complexities. Financial and organizational risks. Risk becoming depending on a partner. Partial loss of decision autonomy. Partners’ cultures may clash. Loss of organizational flexibility
- 22. 4.State and outline at least 7 Types of strategic alliances giving local and international examples Joint Ventures A joint venture is an agreement by two or more parties to form a single entity to undertake a certain project. Each of the businesses has an equitystake in the individual business and share revenues, expenses and profits. “Joint Ventures are agreements between parties or firms for a particular purpose or venture. Their formation may be very informal, suchas a handshake and an agreement for two firms to share a booth at a trade show. Other arrangements can be extremely complex, such asthe consortium of major U.S. electronics firms to develop new microchips,” says Charles P. Lickson in A Legal Guide for SmallBusiness. Joint ventures between small firms are very rare, primarily because of the required commitment and costs involved
- 23. There are two types of joint ventures: Project-based Joint Venture: This type of alliance may commonly be used on a project by project basis. In other words, the creation of a separate entity through the alliance of two or more organizations for the purpose of carrying out a specific project. Full-blown Joint Venture: This type of alliance requires significant resource input. It is expected to remain a viable entity for a significant length of time, certainly spanning multiple projects.
- 24. Advantages Advantages Allows for sharing of risk (both financial and political) Provides opportunity to learn new environment Provides opportunity to achieve synergy by combining strengths of partners May be the only way to enter market given barriers to entry
- 25. Disadvantages Requires more investment than a licensing agreement Must share rewards as well as risks Requires strong coordination Potential for conflict among partners Partner may become a competitor
- 26. Outsourcing The 1980s was the decade where outsourcing really rose to prominence, and this trend continued throughout the 1990s to today, although to a slightly lesser extent. The early forecasts, such as the one from American Journalist Larry Elder, have been shown to not always be true: “Outsourcing and globalization of manufacturing allows companies to reduce costs, benefits consumers with lower cost goods and services, causes economic expansion that reduces unemployment, and increases productivity and job creation
- 27. Outsourcing Involves farming out value chain activities to outside vendors. Outsource an activity if it: Can be performed better or more cheaply by outside specialists. Is not crucial to achieving sustainable competitive advantage. Improves organizational flexibility and speeds time to market. Reduces risks due to new technology and/or buyer preferences. Assembles diverse kinds of expertise speedily and efficiently. Allows the firm to concentrate on its core business, leverage key resources, and do even better what it does best.
- 28. Disadvantages Hollowing out resources and capabilities that the firm needs to be a master of its own destiny. Loss of control when monitoring, controlling, and coordinating activities of outside parties by means of contracts and arm’s-length transactions. Lack of incentives for outside parties to make investments specific to the needs of the outsourcing firm’s value chain
- 29. Affiliate Marketing Affiliate marketing has exploded over recent years, with the most successful online retailers using it to great effect. The nature of the internet means thatreferrals can be accurately tracked right through the order process. Amazon was the pioneer of affiliate marketing, and now has tens of thousands of websites promoting its products on a performance-based basis.
- 30. Licensing A contractual agreement whereby one company (the licensor) makes an asset available to another company (the licensee) in exchange for royalties, license fees, or some other form of compensation Patent Trade secret Brand name Product formulations This is a contractual arrangement whereby trade marks, intellectual property and trade secrets are licensed to an external firm. It’s used mainly as a low cost way to enter foreign markets. The main downside of licensing is the loss of control over the technology – as soon as it enters other hands the possibility of exploitation arises.
- 31. Advantages of licensing Provides additional profitability with little initial investment Provides method of circumventing tariffs, quotas, and other export barriers Attractive ROI Low costs to implement to Licensing
- 32. Disadvantages to Licensing Limited participation Returns may be lost Lack of control Licensee may become competitor Licensee may exploit company resources
- 33. Product Licensing This is similar to technology licensing except that the license provided is only to manufacture and sell a certain product. Usually each licensee will be given an exclusive geographic area to which they can sell to. It’s a lower-risk way of expanding the reach of your product compared to building your manufacturing base and distribution reach.
- 34. The two companies made a cross-licensing alliance. Motorola ceded part of its microprocessor technology, in exchange Toshiba allowed Motorola part of its memory chip technology. Therefore, the risk of ceding technology was shared.
- 35. Franchising Franchising is an excellent way of quickly rolling out a successful concept nationwide. Franchisees pay a set-up fee and agree to ongoing payments so the process is financially risk-free for the company. However, downsides do exist, particularly with the loss of control over how franchisees run their Franchise
- 36. The most notable examples for franchising is Coca Cola and McDonald’s.
- 37. R&D alliances Strategic alliances based around R&D tend to fall into the joint venture category, where two or more businesses decide to embark on a research venture through forming a new entity
- 38. Distributors alliances/Distribution Relationships Distributors If you have a product one of the best ways to market it is to recruit distributors, where each one has its own geographical area or type of product. This ensures that each distributor’s success can be easily measured against other distributors This is perhaps the most common form of alliance. Strategic alliances are usually formed because the businesses involved want more customers. The result is that cross-promotion agreements are established. Consider the case of a bank. They send out bank statements every month. A home insurance company may approach the bank and offer to make an .
- 39. Distributors/Distribution Relationships cont exclusive available to their customers if they can include it along with the next bank statement that is sent out. It’s a win-win agreement – the bank gains through offering a great deal to their customers, the insurance company benefits through increased customer numbers, and customers gain through receiving an exclusive offer