Main Points in the Supply Chain Industry, Essay Example

Strategic alliances allow companies to combine their competencies and creating new competitive advantages. These alliances, such as the one that was created between Nissan and Renault allowed the brands to expand into new markets and build upon the knowledge and strength of the other brand. In the supply chain industry, joint purchases and strategies can reduce costs and increase market share.

Market types determine companies’ motivation to use strategic alliances. In slow-cycle markets, the main reason can be to maintain the stability of the market. In fast-cycle markets, one main motivator can be the increased speed of research and development projects: building upon each others’ knowledge of the market, the companies can develop new products for new markets faster and share the costs of R & D. In standard-cycle markets, strategic alliances can increase market power. In supply chain management, developing a new system to manage supplies can be a joint effort, reducing the cost for individual companies.

It is important to create complementary strategic alliances apart from business-level ones. In supply chain management, knowledge, learning, market knowledge can be utilized by both companies. As a result of a complementary strategic alliance within supply chain management, both companies can reduce cycle time and this way create a competitive advantage.

A network cooperative strategy alliance formed among more than two companies within the same industry or within related industries can have an impact on the overall competitiveness of the firms, the stability of the market, research and development and supply chains. A joint alliance of companies using the same raw materials can set up a joint supply chain management network that enables them to access parts and materials at a reduced price and faster than firms that are not a part of the alliance.

Alliances can be created to respond to competition’s threat to market share or to reduce uncertainty on the marketplace. Capacity sharing, logistic alliances of automobile firms can help companies deal with market fluctuation. Collusive strategies (explicit and tacit) can reduce the competition and have a positive (in case of tacit: indirect) impact on strategic decisions related to output and pricing.