Describe the basic concept behind strategic alliances. In what ways can strategic alliances facilitate a firm’s quest for quality?
Strategies have become one of the most important factors in making any major event happen in the organization. Every organization needs to strategize their moves very carefully and choose them as the situation requires. In such a case, strategic alliance is one of the major moves that any company makes in its lifetime. The event marks as a definite milestone for any organization. When talking about alliances, it is important to understand that not every partnership or alliance has a strategic motive attached behind it, although most of the organizations today do so with that agenda (Wohlstetter, Smith, & Malloy, 2005).
Strategic alliance refers to the concept of forming a bond between two or more companies by agreeing on a set of rules, procedures and obligations that has to be followed by them and carry their individual business. The companies involved develop strategies through evaluation of the products and services that they offer and on the basis of that they develop a general agenda. This agenda helps to increase the productivity in the respective companies and creates a scope of expansion in the customer market by using the name of the other allied companies. The formation of strategic alliance is important from the point of view of creating a position in the market which has seen tremendous amount of variation in the needs and demands of the consumers. This helps the companies to enter a new market and serve as a competitor to the leading company by providing the users with a better product or service that provides the integration of both the company’s customer service and technology. This helps to create a niche in the local as well as international market for the companies (Culpan, 2009).
There are various reasons and factors that support the company’s urge to deliver a quality product or service through strategic alliances. The two major reasons why companies usually go for strategic alliances are to make sure that the core competencies of the organization are getting a boost by the alliance or when the goals and objectives of the companies are so aligned that they could profit a lot more if they allied with one another. While these factors are the major reasons for strategic alliances between two companies, the part about being strategic and formulating strategies takes place once the alliance takes place and the refreezing regarding the change takes place (Wohlstetter, Smith, & Malloy, 2005). Some organizations have well-formed strategies in order to address this transformation and a lot of agenda post that. There is a great amount of flexibility obtained through the strategic alliances in terms of high quality. It provides a growth in the strengths that the companies involved in the alliance have and a decline in the loopholes and other weakness elements. There are various sections where a huge amount of cost is saved without compromising the quality factor. This sections involve the research and procedure related to the development of product or service and this in turn improves the quality of the product.
What is a benchmark firm? Why is it good practice for a benchmark firm
to open its doors and allow others to view its operations and tour its
A benchmark firm refers to the company that is one of the best in its field or the one that adopts the best policies and other companies compare and evaluate their system and practices with reference to it. A benchmark firm ensures that the systems and procedures that it is executing leads them to be the best among their competitors in the market. Companies evaluate themselves through using a bench mark firm so as to directly obtain its improvement in terms of profits gained and improvements made. It also helps them to forecast the future strategy that would help in continuous improvement of the firm’s operations and practices (Elmuti & Kathawala, 1997).
It is a good practice for the firms to open its doors for the other companies to enter its firm and view and analyze the various operations since it provides the firms with good relationship with other firms, better understanding of their own practices. It also keeps an eye that the operation within the firm is maintained as per the required high standards that it has been keeping since a long time. The firms continuously improves its practices so as to ensure that it continues to be the best in the market and the firms can benchmark it as an ideal firm for the practices and operations executed (Bendell, Boulter, & Kelly, 1993).
What are the pros and cons of becoming a benchmark firm? If you were the
manager of a highly successful company, would you want other companies
bench-marking against your firm? Why or why not?
A bench mark firm in the market makes sure that the best practices and operations are carried in the firm. Being a bench mark firm, there are many elements that the firms need to take of while enjoying the position of the best among the competitors. The advantages of becoming a bench mark firm are that they tend to keep a constant check on the steps of operations and performances that are obtained. It also serves to be one of the motivational factor in maintaining the quality that helps in developing the best position in the market (Bendell, Boulter, & Kelly, 1993).
However, there are few disadvantages of being a bench mark firm. This involves an excessive feeling of satisfaction among the employees and this does not let them to work and strive for continuous improvement. At the same time, the competitors may outperform the bench marked firm by knowing and evaluating all of its strategies and developing a better strategy or check for performing in their firms. The bench marked firm would be totally unaware of this and would continue the practices that it has been following since a long time without modifying or up grading it (Elmuti & Kathawala, 1997).
If I would be the manager of a highly successful company, I would let the other companies to bench mark our firm with a scope of continuous improvement and development in the practices and operations in my company. I would let them do so since it will keep the practices and procedures of the firm under constant check. However, I would also make sure that the employees continue to give their best without getting overly satisfied with their efforts.
Discuss the advantages of concurrent engineering.
Concurrent engineering refers to the process of obtaining products through a design where the various stages of production run parallel to each other. This is also termed as “Parallel or Simultaneous Engineering”. It involves integrating all the functions and operations that are executed in the company. It also helps to achieve the best utilization of time. Resources and cost and helps in optimizing it for the good of the company. It serves to be one of the leading approach in the production industry providing results that are required by the company (Dowlatshahi, 1994).
The process of continuous improvement that involves following steps and making efforts while striving to improve the quality offered by the company. It is observed that continuous improvement is achieved by carrying Concurrent engineering while creating the product (Wright, 2000). Concurrent Engineering helps to attain a continuous urge that is required in the observation of continuous improvement process. It helps to obtain the following advantages that would incorporate in continuous improvement (Dowlatshahi, 1994):
• Increase in productivity:
The adoption of Concurrent engineering in the designing process helps to increase the productivity across the operations and other levels of management. This increase in productivity is a continuous process that is observed in this process.
• Benefit over competitors:
The company that uses Concurrent engineering has an extra hand over the competitors by providing the required quality within the time frame and that too, at an economic cost. The process and practices involved here tend to provide the company a niche over its competitors in the market.
• Optimization of time, cost and material:
While observing and adopting Concurrent engineering, there is a strategic planning of using the sources and management in parallel operations and flow of efforts is kept continuous. This helps in saving the time and cost involved in the development of the product. The resources that are available are also utilized productively to ensure continuous improvement.
• Effective utilization of the efforts:
Concurrent engineering ensures that the efforts of the employees are used continuously without creating any sequence that requires dependence on the other levels of management that would create an obstruction in the time. This will help the employees to channelize their efforts for the development of the product and make sure that their efforts are utilized effectively in the process.
Thus, it can be said that Concurrent engineering helps in the continuous improvement process that has to be observed by the company in achieving its target and fulfilling its objectives in an effective way.
Bendell, A., Boulter, L., & Kelly, J. (1993). Benchmarking for competitive advantage. London:: Financial Times.
Culpan, R. (2009). A fresh look at strategic alliances: research issues and future directions. International Journal of Strategic Business Alliances, p.4.
Dowlatshahi, S. (1994). A comparison of approaches to concurrent engineering. . Int J Adv Manuf Technol,, 106-113.
Elmuti, D., & Kathawala, Y. (1997). An overview of benchmarking process: a tool for continuous improvement and competitive advantage. . Benchmarking for Quality Management & Technology,, 229-243.
Wohlstetter, P., Smith, J., & Malloy, C. (2005). Strategic Alliances in Action: Toward a Theory of Evolution. Policy Studies Journal, 419-442.
Wright, A. (2000). Scenario planning: A continuous improvement approach to strategy. . Total Quality Management,, 433-438.