Chapter 7 Formulating Strategy

Chapter 7 Formulating Strategy Name: Institutional Affiliation: Course: Instructor: Date of Submission: Chapter 7 Formulating Strategy 7-1 Discuss the reasons that companies embark on cross-border strategic alliances. What other motivations may prompt such alliances? What are the driving forces for firms in emerging economies to embark on strategic alliances? How can SMEs expand abroad through relationships with MNCs? Companies embark on cross-border strategic alliances for many reasons tied to the many benefits accrued from such arrangements. One of the reasons is market expansion, the citizens of the country in which the business is being established will resonate with their own, hence the likelihood of success of the business. The other reason is cost and technology. Alliances combine efforts to reduce the capital and other costs incurred in starting a new business (pg.251). In the same breath, it helps in the distribution of risks (Miles et al., 2014). Lastly, it helps avoid harsh regulations and bureaucracies regulations such practices. The other motivators include: reducing trade barriers that can be exerted on new non-local businesses. Additionally, alliances promote innovation and new ideas. There are several driving forces for firms in emerging economies to embark on strategic alliances for instance increasing access to capital and technology (pg.251). Forming alliances with established companies or multinational corporations increases accessibility to resources to enable smooth business. Another driving force is the ease of accessing the global market and establishing a customer base. SMEs can expand abroad through relationships with MNCs by first overcoming their resource constraints by leveraging their network with multinational companies (pg.251). 7-2 Why are there an increasing number of mergers with companies in different industries? Give some examples. What industry do you think will be the next for global consolidation? The increasing number of mergers has been necessitated by the need to diver...