Gene One Merger, Essay Example

Strategic Alliances

According to Griffin & Michael (1999), strategic alliances are arrangements between two or more companies that the companies employ to facilitate mutual remuneration. Alliances are not limited to the sharing of knowledge, expenses that are incurred, the necessary expertise, gaining of entry to new market environment or a company seeking to acquire competitive advantage, but are also employed by companies alleviate the threat of competitors by turning them into partners striving to accomplish common goals.

According to Doz & Gary (1998) joint Ventures are simply partnerships adopted by corporate players. Joint ventures can be either with local companies or be of international nature. Gene One can enter into joint ventures for specific business purposes sharing ownership and control of the process particularly in instances characterized by plenty of investment risks and insurmountable legal restrictions. Just like other strategies employed by organizations, joint ventures are liable to both risks and advantages. Joint venture as a strategy is considered by marketers to be dynamic in nature. Gene One can enter in partnerships with companies and venture into the IPO market that it knows little of so as to acquire knowledge in the long run. Some of the advantages that the company is likely to experience are that the joint venture reduces the costs that are attached to doing business as the companies share both risks and expenses.

Gene One is also likely to gain competitive advantage by having a strategic alliance with Genetics Corporation Company a favorable already established brand image. Gene one is also likely to gain knowledge and more expertise in the genetics field. The contribution of skills, the respective knowledge of the market, the brand and the assets allows for a synergistic effect. And finally the strategic alliance between Gene One and the Genetics Corporation Company will ease the entry of Gene One into the IPO market, providing Gene One with the adequate knowledge of the markets. According to Lorange & Johan (1993) among the benefits that companies that employ IPOs include the availing of the necessary capital required for expansion that Gene One requires. IPOs are also employed by companies seeking to be traded publicly.

References

Doz L. & Gary H. (1998). Alliance Advantage: The Art of Creating Value through Partnering. Cambridge, MA: Harvard Business School Press.

Griffin W. & Michael W. (1999). Chapter 12 of International Business: A Managerial Perspective. 2^nd Ed. PA: Addison-Wesley, 448-71.

Lorange P. & Johan R. (1993). Strategic Alliances: Formation, Implementation, and Evolution. Cambridge, MA: Blackwell Business