What is a strategic alliance? What are the major types of alliances?
A strategic alliance is an agreement between two or more organizations to join forces in doing business. They may agree to manufacture, develop or sell products and services together. They may also work together in achieving other set business objectives. The major strategic alliances include joint venture, equity and non-equity strategic alliances. Joint venture alliance is an agreement where two or more parent companies agree to establish a separate organization, a child company. If both companies own equal shares of the child company, the agreement is termed as a 50-50 joint venture. However, if one company owns a bigger share than the other company, then that agreement is a majority-owned venture. Equity strategic alliance is established when one organization buys half of the other company. For instance, if Nike bought 50% off Adidas, then a strategic equity alliance is created. Non-equity strategic alliance describes an agreement where organizations enter into a relationship to share their resources to achieve set goals. For instance, if Nike and Adidas share resources to develop a new line of sneakers. It is non-equal because the companies have different resources, and no company owns shares of the other.
Distinguish between cost leadership and various differentiation strategies
Cost leadership is a strategy companies use to make their products more affordable. Companies seek to use resources that will give them a cost advantage. They consider the economies of scale and do not target a high-profit margin. A company that uses this strategy achieves a competitive edge by providing to consumers products that are more affordable than its competitors. However, these products may be of lower quality than their competitors. For instance, Walmart products. On the other hand, companies that use the differentiation strategy seek to be unique in their industry. Companies produce products that are different from those that their competitors are offering. The products are usually of higher price and quality, and customers do not mind paying a lot for them because they highly value them. For instance, Apple products.
What are the characteristics of product and service quality?
A product or service is deemed quality if it is fit for use and meets a customer’s needs and wants. The characteristics include features, performance, reliability, conformance, durability, aesthetics, and serviceability. A product that is high quality has a high performance. Its features are appealing to the customers. It needs to be available when the customer needs it. It should meet the desired standards. It’s durable. Serviceability means that a service can be provided faster, and the service provider is competent enough to provide the service. Anaesthetics refers to the customer’s response to the product.
References
Kalia, V. (2019). Strategic Alliance: What is it, Types, Benefits, & Why you Need It. retrieved from https://www.workspan.com/blog/strategic-alliance-definition/
Anwar, Kofand. (2016). Comparison between cost leadership and differentiation strategy in agricultural businesses. 12. 212-231.
Garvin, D. (n.d). Competing on the eight dimensions of quality. Retrieved from https://hbr.org/1987/11/competing-on-the-eight-dimensions-of-quality