Global strategic alliances

Question 1

Rationale for Franchising

Answer 1

ability to rapidly expand into new markets
mininmal capital investment from the franchisor
it allows for local adaptaion and knowledge

Question 2

benefits of Franchisng as a form of Global Strategic alliance

Answer 2

rapid expansion(new markets,
brand consistency
shared risk and reward

Question 3

Define Global strategic alliance

Answer 3

a partenship between two or more buisnesses for a project,business venture or long-term business arrangement for mutual benefits

Question 4

Give me five Global strategic alliances

Answer 4

1.Outsourcing
2.Acquisition
3.Mergers
4.Joint ventures
5.Franchising

Question 5

what do strategic alliance partners share ?

Answer 5

1.customers,
2. resources, operations,
3. customer databases,
4. target markets,
5. knowledge, contacts,
6. technologies,
7. capital, distribution channels,
8. marketing,
9. brand reputation
10. people.

Question 6

what is the aim for alliance partners ?

Answer 6

to generate financial benefit for both parties by creating or enhancing competitive advantage

Question 7

why would New,Small Businesses Enter Strategic alliances ?

Answer 7

Marketing

Brand reputation

Distribution channels

Question 8

why Large,Established Businesses Enter Strategic Allinces ?

Answer 8

1.Geographic expansion

2.Cost reduction

3.Manufacturing 4.capabilities

Question 9

what are the Advantages of strategic Alliances?

Answer 9

Access to a new market. 

2) Reduction of competition by forming an alliance with competitors. 
3) Larger market share. 
4) Increased sales and income. 
5) Gaining new expertise and technology. 
6) Access to research and development for business development. 
7) Increase in the range of products and service

Question 10

what are the Disadvantages of strategic allinaces ?

Answer 10

1) Inherit weaknesses of the partner, e.g. lack of management
2) Less efficient communication
3) Increased conflict over decisions and alloctaion of resources
4) Loss of control over product quality,operating costs and employess

Question 11

There are four components to being able adress this syllabus point fully

Answer 11

1) Definition

2) Example

3) Rationale for

4) Benefits of

Question 12

define outsourcing .

Answer 12

when an organisation identifies activities that can be given to another organisation to perform on their behalf.

Question 13

what benefits do Outsourcing businesses have ?

Answer 13

1.well-trained staff
2.efficienct operations that can perform the function on a contract basis more cheaply than doing it byself
3.lower costs by using labour in developing countries
4.business can remain focused on what they do best
5.access local knowledge & expertise in new market

Question 14

examples for outsourcing

Answer 14

Game development

Engineering and technical design

Mobile app development

Human resources and payroll. 

Question 15

what is the Rationale for Outsourcing ?

Answer 15

1.It has the ability to Reduce costs,
2.can access specialised skills or tech
3.focuses on core competencies while leveraging external expertise

Question 16

Acquisition

Answer 16

The process of one company purchasing another company,either partially or wholly,to gain full control over its operations ,resources and market presence

Question 17

example of Acquisition

Answer 17

Facebook’s acquisition of Instagram in 2012 for approximately $1 billion. This acquisition allowed Facebook to expand its social media dominance by acquiring a popular photo-sharing platform with a growing user base, enhancing its market position and diversifying its offerings.

Question 18

what is the rationale for Acquisition?

Answer 18

to seek immediate access to new markets,technologies or resources without building them from scratch

Question 19

Benefits of Acqusition

Answer 19

1.Rapid market entry
2.access to specialised resources
3.competitive advantage
4.access to customer base

Question 20

what does Acqusition allow for

Answer 20

it allows for the acquiring company to quickly gain control and integrate the acquired firm’s assets,expertise ,and** customer base into its own operations**

Question 21

What are Mergers?

Answer 21

When 2 or more companies combine to form a single entity,pooling resources and operations to achieve common strategice goals.

Question 22

an example of a merger

Answer 22

the merger between Disney and 21st Century Fox in 2019, valued at approximately $71.3 billion. This alliance allowed Disney to expand its content production capabilities and access new markets, while also integrating Fox’s assets into its existing portfolio.

Question 22

what is the rationale for Mergers

Answer 22

**Companies choose mergers] to achieve **economies of scale,increase market share,and diversify their offering **

Question 23

By merging companies can……..?

Answer 23

1.consolidate resources **
2.reduce competion**
3.enhance their competitive advantage
and position in the global market

Question 24

Benefits of Mergers

Answer 24

1.Increased Market Power
2.Increase Synergies (cost savings ,Complementary product offerings and enhanced innovation
3.Rapid Expansion(quickly enter new markets)

Question 25

what are joint ventures ?

Answer 25

two or more companies forming a new entity to pursue a specifc business opportunity or project together ,sharing risks and rewards

Question 26

what is the rationale for Joint ventures ?

Answer 26

gives companies
1.access.new markets or technoligies while sharing risks and costs with a partner.
2.** allow for leveraging streghts of each partner,combining resouces and market access**
3.Increased competitive markets(usually the companies are independent)

Question 27

Benefits for Joint ventures

Answer 27

1. Risk Sharing(e.g. financial risks, making ventures more feasible)

2.Access to New Markets (e.g. leveraging the local knowledge and networks)

3.Technology and knowledge sharing (improving competitive advantage)

Question 28

Define Franchising (in business terms)

Answer 28

it is where a FRANCHISOR grants a FRANCHISEE the rights to use it brannd name,business model,and processes **in exchange for ongoing fees and royalties

Question 29

Example of Franchising

Answer 29

McDonald’s Corporation is a prime example of a global business that extensively uses franchising.

As of 2022, McDonald’s had over 38,000 locations worldwide, with around 93% of them franchised.

The value of McDonald’s franchise system is estimated to be in the billions of dollars.

Question 30

what is the Rationale for Franchising ?

Answer 30

to expand into new markets rapidly with minimal capital invstment from the franchisor and franchisee
2. local adaptation and knowledge ,reducing risks associated with cultural and regulatory differences

Question 31

benefits of this for Franchising

Answer 31

Rapid expansion
Brand consistency
Shared risk and reward