Watson Dairy Consulting offers consultancy and independent advice on dairy company strategic alliances and joint ventures. We have a strong portfolio of clients from all over the world. We have a wealth of experience and expertise that we use to drive profitability.
Understanding the Strategic AllianceA strategic alliance can be an informal arrangement, the responsibilities of each member are clearly defined. The needs and benefits gained by the alliance will dictate how long the arrangement is in force. A strategic alliance is an arrangement between two companies that have decided to share resources to undertake a specific, mutually beneficial project. Strategic alliances allow two organizations to work toward common goals which are beneficial to both parties of the arrangement. (take care not to break any potential competition rules) The effects of forming a strategic alliance can include allowing each of the businesses to achieve organic growth more quickly than if they had acted alone. The alliance may entail the sharing of duplicated resources for the overall benefit of the alliance.
Advantages and Disadvantages of a Joint AllianceStrategic alliances can be flexible and the two entities can remain independent of one another. A strategic alliance can, however, bring its own risks. While the agreement is usually clear for both companies, there may be differences in how the firms conduct business. Differences can create conflict. Further, if the alliance requires the parties to share proprietary information, there must be trust between the two allies. In a long-term strategic alliance, one party may become dependent on the other. Disruption of the alliance can endanger the health of the company.
Example of a Strategic AllianceA fanchise for banking opens in a supermarket chain of stores saving significantly on overheads and business setup / premises / security / staffing etc.
Strategic alliances can come in many sizes and forms:
A dairy company might form a strategic alliance with a plastic bottle or can manufacturer to save on shipping costs of empty bottles / cans.
A dairy company might enter into open book accounting with a significant customer to ensure best pricing in return for long term security of volumes and profitability.
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