Why do automotive companies pursue strategic alliances?

Why do automotive companies pursue strategic alliances?

• Strategic alliances in the automotive industry help to reach a broader market. Acquiring a more significant market share helps grow the competitive edge of the partnership over the other automakers. For example, the alliance between Nissan and Renault increased their annual sales (Dawson et al.,2018).
• Forming alliances helps improve the generation of new technological trends in the industry. The combining of different automakers brings together diverse methods of generating and applying technologies resulting in better and updated techniques for better products.
• Alliances bring together diversified manufacturing strategies and market research that informs the new alliance on innovative ways of reaching the market.
• Alliances help improve the financial outlook of the companies because of saving on costs.

2. What are the challenges involved with achieving synergy in strategic alliances?

• Achieving synergy in the strategic alliances is hard because the different automakers have diverse ways of managing their teams and blending them is a hard task.
• The teams overseeing assembling of the autos are protective of their brands because of the fear of mixing and losing their uniqueness. Therefore, achieving new approaches to manufacturing is almost impossible.

3. In what ways can national culture create challenges when managing an international strategic alliance?

• The national governments are heavily invested in the automotive industry and are in the position of creating obstacles to act as barriers for some auto executives. International alliances are, therefore, prone to the national government policies of the different countries where the automakers are located (Dawson et al.,2018.

4. Why have strategic alliances in the automotive industry often failed to live up to their expectations?

• Strategic alliances are unable to live up to their expectations because there is a need to protect their unique brands. Protecting their brands prevents them from completely merging and the possibility of growth and profit.

5. Why is China an attractive market for expansion for Tim Hortons? What challenges will it face

• China is an attractive market because of its’ large population.
• More Chinese coffee consumers are on the rise, and the restaurant business is promising in China.

Challenges

• Tim Horton will have to tailor-make for the local Chinese consumer and also roll out integrated payment options.
• There is high competition from local operators and Starbucks Corp, which is also expanding and opening new stores (Weatherby, 2016).