Spanish companies are some of the companies in the world that extend their market to the other parts of the world. They traditionally invested in Latin America but now they are reaching US and European markets but only the Hispanic ones. Because of this, Spain’s foreign deals completion increased by 69% from 2004 to 2005. Strategic alliances are partnerships between two or more companies to achieve mutual goals by having shared financial, managerial, and technological resources.
It can be categorized as joint ventures, equity strategic alliances, non-equity strategic alliances, and global strategic alliances, which is what Spanish companies do. It has the benefits of avoiding import hindrances and other legal requirements, sharing costs of research and development, having accessibility to markets, which is beneficial to domestic firms, reducing political dilemmas, and entering into a new industry easily. Meanwhile, there are some threats in global alliances—failure of some of them, choice of governance, and the dangers of new competition.
However, these can be avoided by choosing a strategic partner; seeking complementary skills, products, and markets; balancing the shared knowledge and competitively sensitive information; and knowing that most alliances do not last for a long time. There should also be strategic implementation which involves putting decisions into actions, creating a “system of fits”, allocating resources, and recognizing the importance of leadership.
In implementing a global sourcing strategy, the firm should analyze its reasons for outsourcing and evaluate the best style to use; have the cooperation of management and staff; have some advice from the alliance partners; and invest in it. However, there are different factors in the each society that influence the strategic implementation. One of these is the government which is unpredictable when it comes to its regulations.
Culture is also a factor which affects the firm’s orientation of rules and work (Deresky, 2002) Three Study Questions: 1. What are the strategies of both parties in a global alliance in coping up their cultural differences? 2. Are there times that partnerships are only beneficial for one party? 3. Are there any limitations for each of the party when it comes to controlling each other? Reference Deresky, H. Global Management: Strategic and Interpersonal. State University of New York. Plattsburg: Prentice Hall