Firstly, it is important to note that strategic alliances are collaborations or agreements for cooperation between companies, with the view of gaining market energy where each business involved will benefit more from the alliance than if the business was using individual effort alone. As a result of the current trends in the steel industry, Tata Steels thought it wise, through its management to look for ways to remain relevant in this industry by maintaining its longstanding reputation and codes of ethics (Joseph, 2009). It is true that as much as steel prices had stabled a bit especially in developed countries, there were glimpses of consolidations and mergers to reshape this industry and the supply chain to be able to increase the competitive edge of the industry in general.
In the wake of these industrial happenings, Tata Steels management through its management were convinced that it is only through coming up with a business scorecard that would outline the business management and strategy that will help the company to strike alliances with other companies in the steel industries that would enable them to remain relevant in the industry (Joseph, 2009). This is the main reason why the Tata Steels company management convened various meetings with the president of Balanced Scorecard and Collaborative to conduct seminars on the use of the scorecard as this tool had become a critical component in integrating the outlined company strategies.
Having defined strategic alliances and in relating it to my organization producing non-alcoholic beverage drinks, it cannot be denied that value opportunity plays a very integral role in the growth of a company. At a time when the organization was almost losing market edge because of individual production, the management thought it wise to outsource some products and raw materials as production was becoming expensive because few companies controlled industry (Austin, 2010). As a result, the industry started to stabilize after which the company entered into agreements with other industries in the beverage industry. Since then, the industry has remained stable as production and marketing is done collectively.
This strategy that the business took was a very critical step in salvaging a company that was almost on its knees. This underlines the importance of strategic alliances to companies in the same industry. As echoed above, some of the importance of strategic alliances to a company include; knowledge and resource sharing which enables companies to pool together resources hence increasing the attractiveness of all the partners. Also, it is important to note that knowledge and resource sharing helps to increase speed to market, reduces the complexity of operations as well as increasing cost efficiency (Austin, 2010). It also improves growth opportunities by enhancing a company's operation, and financial capacity in the industry as these factors are always limited to a certain ceiling. With alliances, the operation and financial capacities of a company are not limited. Additionally, strategic alliances help companies to easily access target markets by overcoming operational problems and localized risks. This is true because allying with a local partner is a recipe to conquering a specific local market or industry.
Austin, J. E. (2010). The collaboration challenge: How nonprofits and businesses succeed through strategic alliances (Vol. 109). John Wiley & Sons.
Joseph, G. (2009). Mapping, measurement and alignment of strategy using the balanced scorecard: the Tata Steel case. Accounting Education, 18(2), 117-130.
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