Research To The Stability Of Strategic Alliances

With technological development and economic globalization,the boundary between "firm" and "market" are more and more vague,as some forms of intermediate organizations like strategic alliance have emerged.Strategic alliances could have benefited all their members,but about half of them failed according to a former survey. In the year2012,"wanglaoji" trademark case attracted a lot of attention,in the case Guangzhou Pharmaceutical Group and JDB Group’s cooperation ended unexpectedly and eventually they became hostile to each other.From this case we could find many flaws in Chinese firms’strategic alliances,especially in their stability.In this paper I used deduction,induction,a math model and comparative analysis to dissect strategic alliances.With a summary and a review of predecessors’ theories,I put forward the definition,classification,causes,characters,strengths and weaknesses of strategic alliances.After that,I came into the discussion of stability factors. A successful strategic alliance needs good cooperative partners,both their strategic adaptability and honesty must be emphasized.A strategic alliance may be regarded as a long-term contract.Compared to a short-term contract,it can encourage more exclusive investment,but its transaction costs are quite high.Since parties are limitedly rational,the initial contract cannot be perfect.According to the GMH model.in a unperfect contract,there will not be enough exclusive investment.Re-negotiation is also costly and inclined to be boycotted by some members who benefit from defect articles,so we should not expect too much.Various forms of alliances are corresponding to different cooperation depth and mutual reliance,so we have to change the form of the alliance to fulfill the actual demands and realize justice and equality.During the running of the alliance,members need to have confidence in each other and make a trust institution to keep the cooperation stable and permanent.In Chinese commercial culture,interpersonal relationships are more significant than contracts.Therefore a good relationship between cooperative partners’managers can improve mutual trust,especially for state-owned enterprises whose manager teams are frequently changed.Inside the strategic alliance,necessary knowledge and information should be shared,so that members can profit from each other and deepen their coordination.Similar cultural grounds may influence cooperation partner choices and decline possible misunderstandings and conflicts.Companions with different cultural grounds are asked to pay attention to cultural merger and accommodation.In allusion to the "wanglaoji" case, I firstly told the whole story and then started theoretical analysis.Because the initial contract had some serious flaws,for example the fixed franchise fee and non-monopolized franchise,Guangzhou Pharmaceutical and JDB came to conflicts.What was worse,they were not willing to re-negotiate.If they had set up a joint venture and put all relative assets into the venture,this problem would have been easily solved,but Guangzhou Pharmaceutical did nothing.JDB relied on "wanglaoji" brand very deeply,but it had no proprietary rights,so it was hold up by Guangzhou Pharmaceutical.If we talk about culture,the great cultural gap between state-owned listed company Guangzhou Pharmaceutical which had got a variety of products and Hong Kong private company JDB which only produce "wanglaoji" cold tea and "kunlunshan" mineral water was quite obvious.Yet their managers themselves did not realize the importance of cultural merger and accommodation.They did not keep close interpersonal relationship and frequent coordination and share necessary knowledge and information.Especially,they had got opposite brand planning about "wanglaoji",which were not fully discussed between them.As a result,their long-term cooperation regrettably ended and they became hostile to each other.But for Guangzhou Pharmaceutical,it was not a perfect victory,because JDB still possessed superior production and marketing capabilities.The trademark is not necessarily going along with the goodwill,so JDB could survive the crisis and still control the cold tea market.In summary,the key issue of the stability of strategic alliances is the choice of alliance form.To reach a "win-win" goal,alliance members should have got good faith and think more about the others,keeping a balance between duties and rights,benefits and costs.Chinese companies ought to learn how to cooperate with partners,in order to adapt to fierce international competition.At last,I gave some advice for Chinese strategic alliances.