The benefits and problems of strategic alliances: a multi-case study of small trading firms in Australia
Creators: name: Zhong, Hua
Publisher: name: RMIT University
Year: 2024

description: Strategic alliances are becoming increasingly prominent in the global economy. Although many firms have realised benefits and expanded their businesses by using strategic alliances, others have encountered severe problems with such alliances; in some cases this has led to business failures. The contrasting results achieved by different firms in using strategic alliances have attracted the attention of business practitioners and researchers.<br>Through a literature review and case studies, the present study investigates the role of strategic alliances in small trading firms. The research questions of this study address the following issues:<br> <br>• What are the potential benefits of strategic alliances to small trading firms?<br>• What are the key issues and problems facing small trading firms with regard to strategic alliances?<br>• What roles do strategic alliances play in the business success or failure of small trading firms?<br>• How can small trading firms realise the potential benefits of strategic alliances while simultaneously minimising the potential problems?<br>The present study addresses these issues by exploring effective ways for partner firms to make best use of strategic alliances in expanding their businesses. Six case studies are conducted on small trading firms in Australia; of these, three were successful in using strategic alliances to expand their businesses, whereas the other three failed. The case studies draw upon documentary research of the files of the six firms and semi-structured interviews with alliance partners and managers involved in the formation and management of the strategic alliances of the firms. By applying the theoretical perspectives of transaction cost, resource dependence, and strategic behaviour, a comparative cross-case analysis of the six case studies is conducted.<br> <br>The major finding of the present study is that a balanced portfolio approach to the formation and management of strategic alliances holds the key to the business success of small trading firms. A 'portfolio' consists of strategic alliances in three categories-(i) product sourcing; (ii) product marketing; and (iii) business finance. The term 'balance' refers to: (i) the significance of the alliance to the participants; (ii) the benefits to the participants; (iii) dependence among participants; and (iv) balance in the overall portfolio. The present research suggests that a balanced portfolio approach not only enables firms to achieve various benefits (such as consistent and competitive product supply, extended marketing channels, and sufficient funds to grow the businesses), but also reduces the occurrence of problems in strategic alliances (such as undue dependence on the resources of partner firms).<br>This thesis proposes practical recommendations for business practitioners to use in forming and managing strategic alliances to expand their businesses. The thesis also proposes directions for future studies in strategic­ alliances research-such as research into the maintenance of an interdependent relationship within the alliance, dealing with crises in alliances, and the internal competencies required by a firm to manage a portfolio of alliances.<br>