Explain why this portfolio approach to alliance management would make sense.
Please respond to each individual response in 2 separate paragraphs with a minimum of 175 words each by agreeing and adding facts to their statement. Example:
Paragraph 1 Response to Billie-Jo: I agree with Billie-Jo because….(175 words)
Paragraph 2 Response to Dana:I agree with Dana because…(174 words)
Here is Biilie-Jo’s answer-Strategic alliances are considered partnerships between two or more companies working toward a common strategic goal. The alliance is meant to be mutually beneficial to all parties. Alliances are formed to strengthen competitive power and competitive advantage. Alliances can at times be the only solution for strategic growth.
It is important for these alliances to be managed appropriately and the portfolio approach makes the most sense to ensure success. According to Wharton, “portfolio management allows identifying potential trouble spots before they become an issue. It can then take quick, necessary action to escalate or resolve those conflicts. The function of managing cannot be buried within a particular division or be relegated to low-level support within business development.”
When managing the alliance portfolio, the company must consider the performance of the portfolio. Metrics must be created to measure performance and determine how the portfolio is measuring up against those metrics. Performance must be reviewed often and on a set cadence for evaluation. The company must also assess whether the alliance is creating a competitive advantage and not creating a disadvantage in the market.
Also in assessing the portfolio, the company must also determine if it has the right alliances to strengthen the company’s market share and profits. It is easier to make these assessments through the portfolio approach.
Here is Dana’s When business alliances are made they can strengthen the businesses strategic objectives or business-level goals. This portfolio approach makes sense because leaders at the corporate level can make decisions to help create economies of sale & share the risks. This will generate greater stock and longer success rates. Business alliances can help expand into new markets to gain a competitive edge. Although, business alliances have a high rate of failure, when done correctly, it can increase a business’ growth and revenue. Making sure you have a solid business plan and specific contract requirements is key to a successful alliance. Gaining new a new customer base with business alliances is just as important as, gaining new innovations and knowledge. These alliances can allow business to obtain innovation, valuable resources and knowledge in a shorter time -frame, which will also be a competitive advantage. Having a competitive advantage in the market is key to success. The corporate level strategy is the choice of direction the firm is intending to take and this why managing the alliance at a corporate level makes the most sense.
This is the original question the professor posed: Respond to the following in a minimum of 175 words:
Alliances are often used to pursue business-level goals, but they may be managed at the corporate level. Explain why this portfolio approach to alliance management would make sense.