Strategic Alliance

Strategic Alliance Business Policy and Strategy MAN6721 February 24, 2013

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Strategic Alliance

Abstract For this assignment the team was asked to write a paper with regard to companies who form strategic alliances and cooperative partnerships to complement their own strategic initiatives and strengthen their competitiveness in domestic and international markets. Strategic cooperation is a much-favored approach in industries where new technological developments are occurring at a furious pace. The team was asked to discuss the following aspects of strategic alliance. Explain a strategic alliance. Research and discuss two companies that have formed a strategic alliance. What are the benefits of this strategic alliance? Are there any drawbacks? What advice do you have to help this specific strategic alliance work?

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Strategic Alliance Introduction

Comcast, the largest home entertainment provider and Verizon Wireless the largest wireless provider go into a joint venture to form a strategic alliance. I work for a telecommunications company and we partnered with a major cell phone provider to be able to cross sell products such as cell phones, tablets, a computers along with internet land lines and home entertainment in one. It has been a profitable partnership. In this case our company collaborated with a wireless provider to achieve a mutually beneficial alliance. What are the benefits of this strategic alliance? Discuss the offensive strategy options and defensive strategy moves your organization (or a company from the case readings in the text) should consider. Explain your reasoning. This strategic alliance allows Comcasts Xfinity video, phone, internet, and home security to be sold in addition to Verizons smartphone and tablet plans. The companies are offering a $300 gift card for new subscribers. The benefits is that it expands the market share for both companies and creates a demand that has not been mirrored by any other home entertainment and wireless provider. It gives both the companies a competitive advantage, not to mention being at the forefront of cutting edge technology. Customers have the option to bundle home entertainment, internet, wireless, and home security. The Ocean Blue strategy seems to apply here because this is unchartered territory and customers want these type of services. The companies plan to develop new products that integrate Comcast Xfinity wired data with Verizons wireless technology. Verizon will cost savings because they can now use Comcasts fiber-based service without having to build out its network which would have cost the company $23 billion over 7 years. The company now has an app that allows for browser functionality to download Comcast home entertainment through a tablet or smartphone device for Android and

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Strategic Alliance iPhone. The services allows customers to use their Wi-Fi service and stream live T.V. The discounts through marketing for Verizon and Comcast for smartphone, internet, and cable packages. This alliance builds competitive advantage and open up to marketing opportunities. It also
blocks competitive attacks from rivals. It helps build, sustain or enhance a core competence or

competitive advantage. Are there any drawbacks? Some drawbacks are the loss of jobs for the Verizon staff that were on the FIOS project as the plan was abandoned after the alliance of the two companies. There is also the potential for technical issues with regard to integration of the two services. What advice do you have to help this specific strategic alliance work? In conclusion strategic alliances are opportunities to form powerhouse partnerships that provide a powerful competitive advantage in new markets, cost, speed, knowledge, and technology access. Alliances between companies have become crucial to business success, particularly in high-tech industries.

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Strategic Alliance

References: Thompson, A., Peteraf, M., Gamble, J., & Strickland, A. (2011). Crafting & executing strategy. (18th Ed.). New York: McGraw-Hill/Irwin.Christensen, A. (2006). 'Wi-fi'ght them when you can join them? how the philadelphia compromise may have saved municipally-owned telecommunications services. Federal Communications Law Journal, 58(3), 683-704,397-398. Retrieved from http://search.proquest.com/docview/213159716?accountid=40833 Daniel, A. L. (2010). A "new" view on "traditional" strategic alliances' formation paradigms. Management Decision, 48(7), 1090-1102. doi: http://dx.doi.org/10.1108/00251741011068798

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