SUBJECT Management TOPIC Alliances SUBMIITTED TO Ghulam Nabi SUBMITTED BY Ghulam ROLL NO.

CLASS SESSION 2012

Strategic Strategic Sir, Prof. . Wajahat Ali 01 BBA (Morning) 2010 2014 Oct 07,

SUBMISSION DATE .

FACULTY OF ADMINISTRATIVE SCIENCES UNIVERSITY OF AZAD JAMMU & KASHMIR DEPARTMENT OF BUSINESS ADMINISTRATION

INTRODUCTION
Nike the largest producer of the athletic footwear in the world doesnt manufacture a single shoe. Gallo the largest wine company on the earth does not grow a single grape. How can this be? you ask, these companies like other companies these days, have entered into strategic alliances with their suppliers to do much of their actual production and manufacturing for them. Strategic Alliances are becoming more and more prominent in the global economy. The number of strategic alliances is almost doubled in the past ten years and is expected to increase more in the future. More than 20,000 corporate alliances have been formed worldwide over the past two years.Survey published in electronics business world showed that 80 percent of electronics companies have strategic alliances and also most are planning. According to recently released study conducted by Anderson Consulting, 82 percent of executives believe that alliances will be prime vehicle for future growth. There is an increasing trend towards multi - national companies alliances. An example of six company strategic alliances was formed between Apple, Sony, Motorola, and Philips, AT & T to form general Magic Corporation to develop Telescript communication software. This Assignment shall elucidate on the China - Pakistan nuclear relationship, and argue how it furthers Chinese intent to proliferate beyond South Asia. It highlights the implications of this relationship on the international community, and suggests measures to counteract it.

Strategic Alliances a Definition A Strategic Alliance is a relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent organizations. What is a strategic alliance? In both the legal and marketing worlds, alliances come in many shapes and sizes. Terms commonly used are joint ventures, collaborations formal and informal, partnering, and partnerships. You may also have heard the terms merger, acquisition, and outsourcing. Some feel that these are not true strategic alliances however it is really just semantics. To simplify things, here is a definition we use: There is more than one person/company collaborating to achieve a result - ultimately to increase profitability (decrease expenses increase revenues). There will most likely be a sharing of people, expertise, technology, property, markets or capital investment. It is aligned with the overall strategic direction of your business. Vertical Alliances: Vertical alliances are relationships between organizations in different industries. This is a type of alliance most commonly found in the service sector where collaboration of expertise can be coordinated to offer complete solutions to clients. Example: Individuals from a civil engineering, project management, construction, landscaping and interior design firms all have different areas of expertise, yet together can deliver a complete building solution. None of the firms could bid on a job of this magnitude independently, but as a team they can combine their expertise for as long as necessary.
In recent years, there has been an explosion of alliances around the world and across industries.

For example: 1) In an effort to establish itself as a force in European and Japanese markets, the NASDAQ formed a joint venture with SSI Technologies of India to develop an Internet-based trading and market system to launch NASDAQ Europe and NASDAQ Japan.

2) In February 2001, The Coca-Cola Company and Procter & Gamble announced a $4.2-billion (all currency in U.S. dollars) joint venture to use Coca-Colas huge distribution system to increase reach and reduce time to market for the P&G products Pringles and Sunny Delight. 3) EPOST was the worlds first national, secure electronic mail-delivery system, an alliance between Bank of Montreal and Canada Post Corp. This partnership connects billers and users in an efficient and secure environment. 4) Star Alliance is the largest partnership in the airline industry; its reach extends to 130 countries and more than 815 destinations, with collective revenue for the partnership at more than $63 billion 5) Hewlett-Packard and NTT DoCoMo created a partnership to conduct joint research on technology for fourth-generation mobile phones, bringing together HPs network infrastructure and computer servers with DoCoMos wireless broadband technology.

Star Airline Strategic Analysis Star Alliance is the world's first and largest global airline alliance, headquartered in Frankfurt am Main, Germany (near Frankfurt Airport). Founded in 1997, its name and emblem represent the five founding airlines, Air Canada, Lufthansa, Scandinavian Airlines, Thai Airways International, and United Airlines. Star Alliance has since grown considerably and now has 28 member airlines with more than 21,100 daily departures combined. These flights reach 1,356 airports in 193 countries, with an annual passenger number of 678.5 million. The CEO of the alliance is Mark Schwab, replacing former CEO Jaan Albrecht who was named the winner of the Tony Jannus Award for distinguished leadership in the field of commercial aviation in 2010. Members of Star Airline Member Airline Adrian Airways Aegean Airlines Air Canada Air China Air New Zealand All Nippon Airways Asian Airlines Austrian Airlines Joining 2004 2010 1997 2007 1999 1999 2003 2000

Egypt Air Ethiopian Airlines LOT Polish Airlines Lufthansa Scandinavian Airlines Singapore Airlines South African Airways Swiss International Air Lines TACA Airlines TAM Airlines TAP Portugal Thai Airways International Turkish Airlines United Airlines US Airways

2008 2011 2003 1997 1997 2000 2006 2006 2012 2010 2005 1997 2008 1997 2004

Analysis of Star Analysis We feel the most important area the Star Alliance must focus on moving forward is to further integrate their services. Their business model works as it clearly offers customers a much larger travel coverage area, frequent flyer miles, etc. It just needs to be refined a bit more. The most critical issue I see is the lack of consistent integration across the alliance. They claim to have it, in fact they probably do in small pockets, but it must be done consistently across the board to realize both tangible and intangible benefits. The above can be achieved through a 2 prong approach. 1. First, they should create a more robust centralized IT infrastructure that integrates all systems. This would ensure that both tacit and implicit knowledge would be disseminated to all alliance members in an efficient manner. 2. The second approach would be to develop the necessary tools to quantify the alliances absolute value.

Coping with Crisis It is said that the greatest challenge any organization can face is an inconceivable disaster that relates directly to ones industry. Theres no roadmap or guideline that would assist in coping or adjusting to such a disaster. There is, quite simply, only so much preparation that can be done to account for the endless number of disaster variables. One of our most catastrophic events of our time, 9/11, would test the Star Alliance business model and push its boundaries to the limit. The alliance members regrouped shortly after 9/11 as they quickly realized those tragic events of September 11 would forever change the aviation industry. Immediately after 9/11, a taskforce was formed which was geared towards cutting costs across the entire alliance. Some initiatives included consolidation of projects, joint purchasing, and avoiding the duplication of processes at airports and call centers. The main objective was to identity immediate cost reductions and laid the foundation for long term cost savings.

2.GOOGLES STRATEGIC ALLIANCES IN THE MOBILE INDUSTRY Google started eyeing the wireless field as early as 2000, when it was chosen by Omni Sky a wireless Internet service provider in the US to provide its Internet search engine for the handheld devices that Omni Sky serviced. While Google was just in the beginning of its rise as the leading Internet search engine, it was already actively exploring the wireless Internet market possibilities, by forming alliances with various companies in the field, such as operators and web browser developers. Googles ambitions to establish itself as a leading search provider in the mobile segment stretched as far as Europe, with deals made with an operator Vodafone. These strategic developments are not surprising considering the commercial introduction of WAP (Wireless Application Protocol) services based on 2G standards in most advanced countries back in 2000 (Ahonen, Kasper and Melkko, 2004). There were a lot of expectations to WAP in the industry, and it gave rise to many new and established companies entering the space. However, WAP turned out to be a failure, due to various technological and market factors (Sigurdson, 2001). Partner Business type Partnership Omni Sky EPods GiantBear.com Shadow pack Nextel Communications wireless Internet Internet appliances wireless Application Services enhanced wireless environment wireless communications services Google Search Google Search Google Search Google Search Google Search

Pox ServicesNeomar Palm Chilipadi Vodafone Yahoo! Vodafone Handspring Sprint Cingular Wireless AT&T Wireless

wireless software platform and WAP Browser handheld computers, My Palm portal Malaysia's Mobile Content Portal European multi-access portal Yahoo! Everywhere mobile portal mobile Internet portal web browser for Palm OS handhelds wireless carrier wireless carrier wireless carrier

Google Search Google Search Google Search Google Search Google Search Google Search Google Search Google Search Google Search Google Search Google Search

After Giving up to the Strategic Alliance by Google After Giving up to the Strategic Alliance by Google, there is a astonished change in the product and services of Google. It was not until 2005 that Google resumed its attempts to establish itself in the mobile Internet space In May 2005, Google launched a mobile service for its blog publishing system Blogger.Blogger users were then able create messages and post photos taken with their camera phones directly to their blogs . One month later, the new Google Mobile Web Search was released. Since then and until end of 2008, Google released mobile versions of most of its Internet services. Three recent products launched or previewed by Google between February and May of 2009, which represent significant importance for the mobile services industry, are Google Latitude, Google Voice and Google Wave. Google Latitude is a location-aware mobile application that maps users geographical location on Google Maps. It is compatible with most mobile platforms for smart phones, including Android, Symbian and the iPhone.Google Voice is a telecommunication service, that lets users create a special Google phone number, control call forwarding, voicemail, SMS services, etc. through a Web-based interface that looks like Gmail, and access services like call history and transcription of voicemail messages to text emails. Google Voice is currently only available in the US. Google Wave is a communication and collaboration tool, which unites email, instant messaging and threaded conversations that have become so popular from the use of social networking and micro logging sites like Face book and Twitter. Google Wave is currently in active development and Google plans to release it as an open source platform. Product Google SMS Google Local for mobile Blogger Mobile Google Mobile Web Search Google Maps for mobile Gmail Mobile

Google News for mobile Mobile ads in Japan Google CEO Dr. Eric Schmidt Joins Apples Board of Directors Gmail mobile client Google Checkout for mobile You Tube for mobile Google Calendar for mobile Google Ad Sense for Mobile Version 2.0 of Google Maps for mobile With "My Location" Technology Google for iPhone application Google Earth on iPhone and iPod touch New Version of Google Mobile App for iPhone, now with Voice Search Google Voice mobile app for Blackberry and Android

3. Pak China Historical background During the height of the Indo - US nuclear agreement, China firmly opposed it on grounds of inequitable approach to the region, thereby arguing t hat Pakistan too should be given the same exemptions which India had qualified for. While Chinese opposition waned during the important Nuclear Suppliers Group (NSG) waiver to India in August 2008, a sting in the tail soon followed. In April 2008, China assured Pakistan all help and support to set up at least four new nuclear power plants to meet its growing energy demands. China Pakistan Strategic Alliance: A Short Introduction To understand the nuclear alliance between China and Pakistan, it is also useful to understand the political relationship between the two countries. Pakistan was one of the earliest countries to recognize the Peoples Republic of China, becoming only the third country, and the first Muslim country to recognize the Communist state in 1950. Diplomatic relations were established the following year in 1951, between Beijing and the then capital Karachi.3 However, relations between the two countries were not entirely cordial, owing to numerous regional issues. These included Pakistans membership of Western backed alliances, including South East Asian Treaty Organization (SEATO) as also of the Central Treaty Organization (CENTO). Significant movement on China- Pakistan relations followed the ChinaIndia border war of 1962. The beginning of a perceivable shift in Chinas policy towards India can be linked to the developments after the 1962 war and was clearly seen in Chinese support to Pakistan against India, during the 1965 India - Pakistan war. Pakistan China Nuclear Reactions Zulfikar Ali Bhuttos last testament reveals that 1976 was the inaugural year for China Pakistani nuclear cooperation9, with American concerns about this cooperation following suit. Talks between US Secretary of State Henry Kissinger and Bhutto during this period, discussed the

nuclear cooperation between the two countries, however, the focus was on nuclear reprocessing; uranium enrichment was not yet a concern. In 1986, a formal treaty outlining the nuclear cooperation between the two states was signed. 1986 is also significant, since it came at the height of the Cold War conflict in Afghanistan, and therefore, an ideological battle for influence in the region was being fought by the two superpowers. Pakistan recognized its frontline role in being the vanguard for the Islamic world against Communism, following which President Zia ul Haq rhetorically declared the following about nuclear weapons: It is our right to obtain technology. And when we acquire this technology the Islamic world will posses it with us. Why Proliferate to Pakistan? Chinas proliferation to Pakistan achieves twin strategic objectives of encirclement of India, and a proliferation buffer, wherein Pakistan in turn further proliferate Chinese nuclear technology, giving China leeway in investigations. According to Robert Ross, China continues its support for Pakistan by supplying nuclear and missile technology because China views a credible Pakistani deterrent as the most effective way to guarantee the security of its sole ally in Southern Asia against Indian power. This argument is also postulated by T.V Paul, that China wants to limit Indias power capabilities to South Asia and thereby constrain New Delhis aspirations to become a major power in Asia. Indias emergence as a peer competitor in Asia would upset Chinas predominant position in the region. However, if acute conflict and an intense arms race between India and Pakistan persist, India would continue to be bracketed with its smaller regional rival Pakistan and not with China. Proliferation to Pakistan, also offers China a certain leeway in their doctrinal stance of No First Use, since Pakistan does not subscribe to that element. China can make use of its proxy in instigating a nuclear Conflict in South Asia, wherein the affected parties would be Pakistan and India, with China attempting to emerge unscathed. .For China, using Pakistan as an extended deterrence proxy was much more practical than merely extending its nuclear umbrella onto Pakistan. This would likely explain the Chinese aversion to Pakistani Foreign Minister, Shamshad Ahmeds request in 1998, to guarantee nuclear protection should India attack. While growing Indian aspirations in the region are clearly opposed by China, the original reason for the Sino - Pak relationship was largely economic. According to Mao Zedongs calculations, Pakistan was nothing but Chinas easy access to the Atlantic and the Indian Ocean. It was to be the route for Chinese access to Middle Eastern oil, and resources to Africa, and therefore there was a need to build upon an economic and military relationship with the country. This argument is bolstered through the fact that China has been deeply involved in building of a deep water naval port at Gwadar, Baluchistan, and has consistently advocated Pakistan as a Trans - national corridor for Middle Eastern energy transport to its mainland. The nature of the China Pakistan military/nuclear alliance makes it beneficial for China to extend its nuclear proliferation tentacles worldwide through proxies; thereby holding a level of plausible deniability in international forums. This is exemplified in the case of proliferation rogue states of North Korea, Iran and Libya, wherein Chinese nuclear components have been found, courtesy the proliferation ring run by A.Q Khan Laboratorys. Therefore, China can use Pakistan as a scapegoat for any eventual international sanction, gambling on Pakistans geo - strategic importance for furthering its own interests beyond the region. Analysis of Pakistan China Strategic Alliance A consequence of the China Pakistan nuclear trade has been further proliferation from Pakistan to additional states, thereby weakening the non - proliferation regime, and indirectly furthering Chinese strategic interests in these countries. The implications for regional peace and stability in South Asia are also critical, since Pakistan continues to hold ambiguous red lines on its nuclear doctrine, allowing it to extend a nuclear umbrella over terrorist groups based in Pakistan,

operating against India. Pakistans nuclear links to North Korea were first reported in October 2002, when press reports suggested that nuclear materials and technology for uranium enrichment were transferred to North Korea since 1997.44 In July 2011, A.Q Khan made further revelations on the nuclear trade between Islamabad and Pyongyang, alleging that $3.5 million was paid to senior Pakistani officials to facilitate the agreement. Collaboration with North Korea for missiles was acknowledged by Benazir Bhutto, who said When I went to North Korea, AQ Khan told me we could get their missile technology so that we can compare it to our own. So I took it up with Kim IL SungDecember 93 I talked to him, he agreedand it was in cash, they needed money and so it was done for cash, with no exchange of nuclear technology. Exchanging nuclear technology for missiles was never even discussed during my visit. It remains unclear whether the government was in the know about nuclear transactions. However, the spread of the network to countries including Libya, Iran and allegedly to Myanmar, make it difficult to accept that the Pakistani government or Army headquarters was completely unaware of these transactions. Especially in the realm of nuclear transfers to North Korea, as pointed earlier, China would have been aware of the ongoing transfers, owing to the sensitivity of its interests there. The fact that China did not broach this topic with Pakistan, and on the contrary continued its nuclear relationship with Pakistan, leads this author to believe that China tacitly approved of these transfers. Similarly, the implications of Pakistan furthering Chinese products to West Asia can be seen in how Pakistan is trying to play both sides of an ideological divide, by having contributed to the Iranian nuclear program, and having a suspected tie up with Saudi Arabia to arm them with nuclear warheads too.

3Com and Huawei Technologies While Cisco has 60 per cent share of Chinas $1.6 billion market, Huawei has forged a joint venture with 3Com, who will invest $160 million, various patents and licenses and take a 49% stake in the partnership, rising to 51 per cent after two years. The joint venture will manufacture and sell under the Huawei-3Com name in China and Japan and use the 3Com name in other markets. Huawei will provide most o f the 1,500 staff in China and the manufacturing. 3Com hopes, through the partnership to tap into Huaweis 10,000Strong research and design team and ease its way into the fastgrowing mainland routers and switches market. What Huawei really covets is the 3Com brand name. Huawei has already moved well up the value chain of a typical original equipment manufacturer - it sells into 40 countries, has a strong product line and R&D capability to go with its low-cost production. But in getting the pricing power and profits of a Sony or Nike, the missing part of the jigsaw is the brand. But building a brand, especially a global name, takes time and is expensive.
and Communication Mobile to compete in China's nascent 3G mobile technology market. The Beijing-based jointventure, TD Tech, 51% owned by Siemens, was set up to develop and manufacture equipment compatible with the domestic 3G standard, TD-SCDMA. The partnership is expected to employ 350 staff, including 100 from Huawei. Its near-term goal is to start rolling out equipment for the establishment of TD-SCDMA base stations by mid-2005. TD-SCDMA is standard jointly developed by Siemens and China's Datang Mobile. Although there is no timetable for the issue of 3G licenses in China, global telecom players are preparing to access the world's largest mobile phone market, with some 300 million subscribers. The other two 3G standards competing with TD-SCDMA for

China's 3G licences are CDMA2000, developed by US-based Qualcomm, and Europe's W-CDMA. The TDSCDMA standard is apparently backed by the central government. Motorola and Proview International Holdings -- Computer monitor maker Proview has formed an alliance with Motorola in an effort to break the dominance of Japanese and South Korean rivals in China and internationally. Last year, Samsung, Philips, TPV Technology and LG Electronics were the top four brands in the mainland's personal computer monitor market. Motorola intends to use Proview's low-cost production and established distribution network to gain greater market share. The alliance is expected to lift Proview to the first-tier market by increasing its shipments by 250% in three years. The alliance was granted a license to produce and sell liquid crystal display (LCD) and cathode ray tube (CRT) monitors and LCD and plasma television sets under the Motorola brand. The partnership is Motorolas first foray into the highly competitive mainland market for LCD displays and televisions. Proview will start selling the Motorola brand products in China this year and in the US and Europe early next year. The product range will be widened to include DVD recorders and players, optical digital drivers and car audio-video products. This alliance is the latest in an industry-wide consolidation trend. Last year, Beijing-based BOE Technology Group acquired a controlling stake in locally-listed TPV, the world's secondlargest manufacturer of PC monitors. Sun and Chinaunicom -- China Unicom, the world's third-largest mobile phone operator, has signed a far-reaching agreement with Sun Microsystems to develop and promote Java-based mobile data services for the mainland's wireless phone market. The multi-year deal builds on a three-way alliance between Chinaunicom, Sun and services provider Beijing ZRRT Communication Technology. The three partners have set out to create and deploy advanced mobile data applications and services in China under the brand name "UniJa". To foster wide adoption of the UniJa platform, the alliance will also set up a Java Technology Lab to explore new communications industry requirements, develop next-generation services, and carry out mobile certification and testing. A complete Javaecosystem business model for carriers, handset manufacturers, value-added service providers, and application and content developers is now in place Intel and Richtek Richtek (a Taiwan fables IC design firm, specializing in power-management ICs) is working with Intel to develop next-generation power-management chips. They have begun shipping the chips supporting Intel's Grandsdale chipsets. The move prompted HP and Dell to begin placing orders with Richtek and is expected to boost the chip designer's annual revenues. Infineon and Nanya Technology With the objective of expanding and strengthening their positions in the highly competitive DRAM market, the German spinoff from Siemans Semiconductor, and Taiwans sole DRAM supplier for OEMs, have forged a successful alliance. The objectives are to share risks in this highly volatile market, cut costs, and gain market share. Not only are these goals being achieved, but there has also been important exchange of tacit knowledge between these two firms as they integrate highly different corporate and national cultures. Philips and BenQ -- BenQ Corporation, a major Taiwanese mobile phone and display maker, and Philips Electronics formed a partnership to develop and make optical storage products. With an initial investment of $20 million (Philips taking a stake of 51%) the partners expect their companies combined share of the optical storage market to increase to 15% from their current combined level of 8% and to become more profitable. The partnership also aims to attract "knowledge-based" industries to Taiwan, referring to an emphasis on research and development over regular manufacturing. HP and Hon Hai -- Hon Hai Precision Industry Co., Ltd. of Taiwan and Hewlett-Packard recently announced a strategic partnership in their customer-supplier relationship. The agreement is for co-developing new products. Until now, Hon Hai has simply produced HP products according to HPs designs. The alliance appears to reflect a to revised strategy for HP, after Carly Fiorinas departure, to address mounting competitive pressure from rivals, particularly the quickly rising Lenovo of mainland China. The partnership also shows Hon Hais determination to shift itself into a technology developer from a pure manufacturer. The companys chairman said his company would set aside 3% of its annual revenue, or approximately $500 million, for R&D. Although they have not announced what products they will seek to co-develop, it is believed they will focus on consumer electronics such as LCDs, DTVs, digital music players, as well as nanometer materials and nanometer cells. Hon Hai has a strategic alliance with Intel, that was formed in 2002. Infineon, Richtek and System General -- German chipmaker Infineon Technologies and fabless companies Richtek Technology Corp. and System General Corp. of Taiwan have been discussing strategic cooperation after Infineons recent acquisition of AMDTek Inc., another Taiwanese chip designer. The two Taiwanese companies specialize in power-management integrated circuits (ICs). Infineon plans to cooperate with Richtek in power-management chips for motherboards and with System in alternating current/direct current ICs.

Richtek is also working with Intel to develop next-generation power-management chips and has begun shipping the chips supporting Intel's Grandsdale chipsets. Hewlett-Packard and Dell Computer recently placed orders with Richtek for the first time. IBM and Kingdee International Software -- With an eye to generating more business from multinational companies, China's Kingdee International Software Group plans to forge an alliance with IBM. Kingdee, a Hong Kong-listed firm since 2001, would be looking to IBM for generating new projects in the mainland and across Asia, especially with foreign multinational firms. Kingdee, which is based in Shenzhen, supplies business-automation software including enterprise resource planning, customer relationship management and supply-chain management programs. It has over 200,000 customers, made up mostly of public and private sector accounts maqinland China. While Kingdee is already one of the leading providers of enterprise software in China's mid-tier commercial market, it is striving to become one of the top 10 enterprise software vendors in the world by 2010.

Conclusions 1) Strategic alliances are no longer a strategic option but a necessity in many markets and industries. 2) Dynamic markets for products and technologies, coupled with the increasing costs of doing business, 3) Have resulted in a significant increase in the use of alliances. Strategic alliances are increasingly becoming an important part of overall corporate strategy, as a way to grow product and service offerings, develop new markets and leverage technology and R&D.

4) Strategic alliances are an indispensable tool in todays competitive business environment. No

longer can companies afford ad hoc approaches to alliance formation and management, any more than they can rely on a small number of talented alliance managers. 5) Many global companies have multiple alliances, some global, requiring coordination with numerous partners. Companies are also finding benefits to partnership with competitors. How are these companies managing this competition? What are they doing to develop a working relationship yet still protect them? The must be created by creating customer value through partnerships, managing alliances with competitors, managing global alliances. New insights on alliance management tools and strategies, focusing on: leveraging differences with partners to create value, dealing with the internal challenges of making your partnerships succeed, managing the day-to-day challenges of alliances with competitors.