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Global Allegiances, A Wise Strategy

By: Admin In: Business Last Updated: 2012-01-09

Strength in numbers is a popular saying that you must have heard frequently. The same rule applies in the world of business as well. Having waded in the deep waters so far on your own relying solely on your own strategies and plans, you are probably considering the option of collaborations with a suitable company located in a foreign country. The country may be one where you are presently doing trade or may be a potential market Choosing a partner for business is almost similar to choosing a friend or a partner for school project or a sports team. You should take into consideration each other's strengths and weaknesses. You can go through your list of contacts and client companies in that country to check for compatibility based on objectives and targets. A partnership with a firm with which you have maintained pleasant business relationship with will make you more confident and secure about the joint venture. The following points will help you weigh the decision balance and reach a suitable conclusion


Pros


  • Exposure to new technology and skills
  • Wider distribution network
  • Enhance the sales
  • Expand the client base
  • Face new opportunities with the strength of combined assets
  • Access to a wider market
  • Availability of combined resources

Cons


  • Risk of lesser equity stake and control
  • Lack or proper communication
  • Clarity on objectives and targets decreases
  • Complications in allocating and utilizing resources
  • Major interest holder tends to govern
  • Compromise on certain aspects

It is important to gather detailed information about the economy and other related information about host country and the company before engaging in an allegiance. An ideal allegiance should be among equally strong and competent parties so that even if you end up with a minority stake, you still have enough force to exert your voice as well.

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