| Running Head: ORGANIZATIONAL ALLIANCES | | | | website services and they exchange links to build |
| Organizational Alliances | | | | more traffic. Occasionally people searching through |
| By: Troy Johnson | | | | links will find other useful websites, but more |
| Argosy University | | | | importantly finding plenty of link allies will improve page |
| MSM program | | | | rank on Google’s search engine. Google’s |
| 12/15/09 | | | | search algorithm gives those sites that have the most |
| Gaining support from allies is effective in the political | | | | inbound links higher page rank because it knows those |
| arena as well as the corporate world. In business | | | | are the name brand websites. |
| companies are constantly looking for the right | | | | |
| opportunities to expand business and product lines. | | | | Since it is less expensive to purchase materials in bulk |
| “Teva Pharmaceutical Industries on July 25 | | | | quantities establishing joint ventures can often improve |
| acquired Ivax for $7.4 billion in cash and stock, marrying | | | | margins. Acquisitions are particularly helpful when |
| two of the world's top makers of generic drugs. Nearly | | | | demand is exceeding the firm’s production capacity |
| $40 billion worth of branded drugs are slated to go | | | | and adding the new firm can provide the needed |
| generic in the next two years, and Israel-based Teva | | | | supply cushion. Acquiring companies that are in similar |
| is now in prime position to grab a chunk of the new | | | | industries is a crucial part of the mix because the |
| business. The newlyweds could get a big boost from | | | | marketing and product knowledge is already set up for |
| insurance companies and the upcoming Medicare | | | | the existing product lines. Straying too far from the |
| prescription-drug program -- both of which are | | | | original mission and product line may mean ineffective |
| expected to push the idea of inexpensive generics to | | | | marketing and increased job training costs. In the |
| patients.” (Gagnier, 2005) Typically partnerships | | | | case of Teva Pharmaceuticals they have increased |
| and acquisitions like these are successful and help to | | | | their market share and production capacity in generic |
| broaden diversification strategies. Executives should | | | | drugs by acquiring other leaders in this market. |
| seek partnerships and consolidation of companies that | | | | Companies today need to strike alliances to stay |
| will improve upon the parent company’s core | | | | competitive especially when markets are nearing |
| objectives and products. During the planning process | | | | maturity. |
| and research phase for the purchase of any new | | | | |
| company the firm should pay attention to costs | | | | |
| associated with integrating communication software | | | | |
| and human resources. Making sure management of | | | | |
| both firms are on the same page will help reduce cost | | | | Organizational Alliance Concepts: |
| and increase profits. The seasonal rental service | | | | |
| LLC is presently looking for alliances that will strengthen | | | | - Strategic alliances build production |
| its core product lines and increase its market share | | | | capacity |
| domestically. | | | | - Alliances can diversify product lines |
| | | | | - Alliances help achieve economies of |
| Forging strategic alliances can often help diversify a | | | | scale |
| company’s product line. It can also increase | | | | - Linking can build trust and increase |
| production capacity which contributes to its economies | | | | sales via Google’s page rank |
| of scale. Looking at the structure of companies in | | | | - Firms should be aware of acquisition |
| manufacturing it is easy to define benefits for strategic | | | | costs like integration of the two company’s |
| alliances, but it can also be beneficial for service | | | | communications systems |
| companies. “Since the supply chain of a service | | | | - Partnerships should be forged with |
| provider does not always provide the customerwith a | | | | similar companies for optimized marketing |
| physical good, its supply chain does not focus as much | | | | |
| on the flow of physicalitems (material, parts, and | | | | References: |
| subassemblies) through the supply chain. It instead may | | | | |
| focus moreon the human resources and support | | | | Gagnier, Monica |
| services necessary to provide its own service.” | | | | In Biz This Week. |
| (Russel, 2009) For example a service company like | | | | BusinessWeek; 8/8/2005, Issue 3946, p40-40, 2/3p, 1 |
| a law firm may not have suppliers, but they have | | | | graph, 1 color |
| marketing departments which help inform the public of | | | | |
| their services. Forming strategic alliances with other | | | | |
| law firms that do not compete or practice the same | | | | Russell, R. & Taylor, B. (2009). Operations |
| type of law could be mutually beneficial. This concept | | | | Management: Creating Value along the Supply Chain |
| is carried out daily through the use of a link online. | | | | (6th ed.). Hoboken, NJ: John Wiley & Sons. |
| Link managers contact other webmasters with similar | | | | |
