strategic alliance and intellectual property rights

8/3/2019 Strategic Alliance and Intellectual Property Rights

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Introduction

Strategic alliances are the competitive weapon of21st century.

It provides an opportunity for large and small hightechnology companies to expand into new

markets by sharing skills and knowledge.In this firms co-operate out of mutual need andshare the risks to reach a common objective.


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Strategic alliance

Definition Acc to Chan and Heide defined strategic allianceas it is a contractual agreement amongorganizations to combine their efforts and

resources to meet a common goal. However it can also be defined as A strategicalliance is an agreement between two or morepartners to share knowledge or resources, which

could be beneficial to all parties involved.


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Agreement for cooperation among two or moreindependent firms to work togethertoward common objectives. Unlike in a jointventure, firms in a strategic alliance do not form anew entity to further their aims but collaboratewhile remaining apart and distinct.

A Strategic Alliance is a relationship between twoor more parties to pursue a set of agreed upongoals or to meet a critical business need whileremaining independent organizations.
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Acc to Chan and Heide defined strategic allianceas it is a contractual agreement amongorganizations to combine their efforts andresources to meet a common goal.

However it can also be defined as A strategicalliance is an agreement between two or more

partners to share knowledge or resources, whichcould be beneficial to all parties involved.


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Reasons for strategic Alliance

Gain access to a new or restricted market

Develop new goods or servicesFacilitate new market entry

Share significant R&D investments

Share risks against uncertainty

Develop market power

Gain access to complementary resources

Build economies of scale

Meet competitive challengesLearn new skills and capabilities

Outsource for low costs and high quality output


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Process of strategic alliances

SELECTION OF SUITABLE PARTNER

NEGOTIATION OF EACH OTHERS NEEDS

MANAGEMENT TOWARDS COLLABORATION


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Stages in Alliance Formation

Strategy Development

Partner Assessment

Contract Negotiation

Alliance Operation


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An alliance can fail for many reasons failure to understand and adapt to a new style of

management failure to learn and understand cultural

differences between the organizations

lack of commitment to succeed

strategic goal divergence insufficient trust

operational and geographical overlap

unrealistic expectations


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Joint VenturesA union of two or more parties who

contractually agree to contribute to a specificventure which is usually limited to a specific taskfor a specific period of time

A joint venture is a separate legal entity

generally governed under partnership lawwhichvaries from state to state

The JV parties can be individuals, partnerships orcorporations that continue to operate

independently from the other except for activitiesrelated to the Joint Venture.


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Joint Venture Strategic AllianceThis is where two businesses may join together toform a separate business, owned by bothcompanies. Many companies who are incompetition with one another, will join forces andshare the market.


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Pros and cons of Joint VenturesAdvantages

Allows for sharing of risk (both financial and political) Provides opportunity to learn new environment

Provides opportunity to achieve synergy by combiningstrengths of partners

May be the only way to enter market given barriers to

entry

Disadvantages

Requires more investment Must share rewards as well as risks

Requires strong coordination

Potential for conflict among partners

Partner may become a competitor


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INTELLECTUAL PROPERTY RIGHTS

Patents--------Offers a 20 yrs monopoly.

Copy Rights----Provides exclusive rights tocreative individuals for the protection of theliterary or artistic productions.

Registered Designs----As protected byregistration is for the outward appearance of anarticle and provides exclusive rights for up to 15yrs.


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Registered Trademark---Is a distinctive name,mark or symbol that is identified with a companysproducts.

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strategic alliance and intellectual property rights

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