An Empirical Research On Influencing Factors Of Value Of Strategic Alliance Option

Enterprise strategic alliance is a kind of organization which lies in between the market and the firm. Alliances are a special institutional arrangement through which enterprises overcome the boundaries of resources, capacity and business to realize the integration of external resources. Alliance as some kind of strategic device that characterized with flexibility and risk resistance ability, has gained more and more attention. By taking alliances as a special real option which can bring us profitable opportunity with low exposes to risks, we can reveal some special and unknown characteristics of strategic alliance.Alliance is the mean and not the purpose. To set up an alliance is also a kind of strategic investment, and alliance has its own real option character. Firstly, the motive of alliance lies in uncertainties of external environment, and those uncertainties can be classified as technical uncertainty, resource uncertainty and market uncertainty. Secondly, alliance has three real option characters such as preventive investment, lingering decision and tradeoff decision between preemptive action and waiting action. The essay conclude that:1. The higher the alliance expected revenue, output and expected volatility, the higher alliance option value to both partners.2. The larger the disparity between two partners'valuation, the higher the alliance option value to both sides.3. The more significant the difference between partner's valuation basis such as correlation of valuation, operation capacity, quality of assets, technology and management, the higher the alliance option value.4. The stronger one partner's negotiation power, the higher alliance option value to it. As for assumption 2, the relation between initial equity share and alliance option value has not been testified due to the Chinese sample features.We find that alliance option value can to be an important criterion in the selection of alliance strategy or acquisition strategy. The essay proved that the higher the alliance option value, the higher the probability of selection of alliance strategy and vice versa. We find that:A. The higher the uncertainty such as higher market uncertainty or higher resource uncertainty, the higher the probability of selection of alliance strategy.B.The higher the difference between partners'valuation basis such as poor correlation of business, greater difference in space and culture, the higher the probability of selection of alliance strategy.4. Acquisition after alliance is a typical alliance option behavior. In order to analyze the decision process clearly, we focus on a more actual situation that the alliance has some competitors, and the implementation of strategy has a leader and a follower. We concluded that:A. There are three stages in this strategy:Stage 1 is alliance, stage 2 is the leader's action stage, stage 3 is follower's action stage. Alliances are waiting to see the initial earnings of alliance strategy, once the earnings hit the threshold value, the leader alliance will exercise the option. And this behavior will influence the market and help shaping a new structure. In stage 2, the follower will decide when to implement acquisition based on its market share and earnings.B. The key index the alliance take into account when it deciding whether to implement acquisition or not, is the initial alliance revenue. Once the earnings hit the threshold value, it will be triggered. The main key factors that influencing the threshold value in the essay includes alliance scale effect which measured by labor and capital input and volatility of revenue.C. The higher the volatility of alliance earnings, the higher the risk and the uncertainty the alliance will face with, the lower the probability of the acquisition behavior. When it comes to scale effect, we found that as the volatility increasing alliance in larger scale superior to the smaller one due to its threshold value's weak ascending trend.D. Scale plays an important role in strategy of acquisition after alliance. Alliance in larger scale is more powerful than those smaller ones. If the alliance in larger scale becomes leader, the barrier effect to the follower will be more obvious. And if the alliance in larger scale becomes follower, its disadvantage is not so obvious.