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Strategic Alliance

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Write a paper describing structure, implementaiton, and impact of a global strategic alliance, and answer the following questions

Bood referernce: International Business: Enviornments and Operations. Prentice Hall 2007. by Daniels, Radebaugh, and Sullivan. and International Business. John Wiley & Sons, 2004 by Shenkar, Oded and Yadong Luo.

Exposition a priori:

There are two multinational corporations: Sun Oil Corporation (SUNOCO,) based in New Jersey, USA, and YPF Sociedad Anomina, based in Argentina. Sunoco refines, finds, and exploits deposits of petroleum called heavy crude. They make petroleum into marine fuels, coke, and lubricants. YBF is an Argentinean company that specializes in the exploration and exploitation of crude oil, natural gas, and liquefied petroleum gas in inhospitable regions.

Recently, the Argentinean government lent out exploration rights of Isla de Los Estados (an island 20 km East of Tierra del Fuego) to bid. A cursory survey done in the early 1960's stated that there was a 75% likelihood of substantial store of liquefied petroleum gas cached under the permafrost of the island. Sunoco wants to go find out how much liquefied petroleum gas is there.

However, the Argentine government requires all foreign-based corporations 'take on' an Argentinean-based partner.

A. How will you structure the global strategic alliance (GSA?) Will it be a joint venture (which one,) R&D Consortium with additional partners, et al.?

1) What are the characteristics of the GSA structure that you chose?

2) What are the core competencies, strategic advantages, skills, etc. that Sunoco brings to the GSA? Describe three skills, core competencies, and/or strategic advantages that Sunoco has that will increase the likelihood that the GSA will survive?

3) What does each of the partners hope to gain from the GSA? Other than a successful exploration of Isla de los Estados, what does YBF want out of the partnership as opposed to Sunoco?

a. Describe the objectives of this GSA from the standpoint of either YBF or Sunoco.
b. How will YBF or Sunoco achieve these objectives?

B. One of the major challenges facing any GSA is the differences between the partners in strategic vision and objectives. If you were to be made the senior manager for the GSA, describe the controls that you would put in place or steps you would take to minimize those differences.

1) Choose three control mechanisms, and describe how you would implement them.

2) Determine to what extent these three management control mechanisms will actually control the GSA.

3) Forecast briefly any problems or issues that could arise from implementation of these three control mechanisms.

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Solution Preview

The response addresses the queries posted in 1884 words with references.

//The paper deals with the global strategic alliance between companies of two countries, namely, Sun Oil Corporation of USA and YPF Sociedad Anomina of Argentina. It is discussed that how one company of one country, USA, wanting to exploit the resource of another country, Argentina, has to undergo a strategic alliance process. For that, it should accomplish the goal by making some company of Argentina as its partner. The whole paper consists of two parts, A and B, which include further subparts//

Part A. The first section, A, covers the information about the structural construction process and consideration, along with the core competencies and skills of the company who wants to have a strategic alliance with the other company of the country.

Meaning of Strategic Alliance: Before getting to the actual meaning of strategic alliance, it's important to know that it is the combination of two terms: strategy and alliance. Strategies are the plans or rules and regulations that are formulated, so as to achieve the goals of the organization or company, successfully. Alliance is method of cooperation, followed by two groups or parties so as to achieve better results out of a transaction.

Strategic alliance is the activity of entering into partnership, by two parties, so as to gain access to the resources, technology, people, capital etc. This is a kind of cooperation made by two parties for each other, so as to enter into a state of partnership in order to exploit resources and various other facilities available at each other's end. Strategic alliance is a process of getting into partnership, followed by two companies, by which they combine their efforts in completing a project, starting from buying the resources in bulk to producing the product, with each other (Strategic Alliances, 2009).

Strategic alliance is followed by the companies because of various advantages that are the result of this act, attached to the fact. For companies, getting associated with a good and well known company, it becomes a boon, as with this, they get a new position and market share in the market, that is they get recognition in the market. Most of the companies also do this so as to get a wider range of distribution channels (Kotelnikov, n.d.).

Types of Strategic Alliance: There are various structures of strategic alliance that can be followed by the parties, depending upon their requirements. Following are different kinds of strategic alliance:

Joint Venture: This alliance is followed by two parties when they get into an agreement of forming a single entity so as to undertake a specific project. Each parties share equal responsibilities and profit obtained by the working of the entity.
Outsourcing: This form of alliance was used more in the period of 1980s, through which the firms gained profit too. This also continued to the 1990s, and is still in existence, but the extent to which it exists, is slightly lesser as compared to those times. This alliance allows the ...

Solution Summary

The response addresses the queries posted in 1884 words with references.