Global Business Partnerships and Sourcing Strategies

Abstract

Global economic integration is happening rapidly in an unanticipated manner, whether it be through the ongoing formation of partnerships, alliances, co-production agreements, joint ventures, or other tools among leading firms (Ehrlich, 1997). One of the most notable business trends in recent years has been the surge in alliance formation. Globalization, escalating R"D expenses, shortening product life cycles, and convergence of technologies are often cited as important factors that contribute to this phenomenon (Hwang 1997). Strategic alliances represent a means for eager firms to pursue their individual strategies despite limited ressources in some areas. Even though strategic alliances are becoming increasingly important in today’s intensified competitive international business setting, they can, however, present a paradox because, by definition, strategic alliances involve the cooperation between two or more firms. Still, these firms are not necessarily after a quick solution to their ressource shortcomings, not are they impatient in their actions. Strategic alliances require, as they typically acknowledge, a long term viewpoint; a willingness to invest in a relationship (Lorange " Roos, 1993).