Building And Create Success Inter Organizational Strategies

Hillman (2009) indicated that “Resource Dependence Theory” refers to a business entity as an open mechanism that is reliant on contingencies in the external environment (p.2). That is, the theory views a business in relation to its resource dependences with other businesses in the environment (Salazar, 2012). Pfeffer and Salancik (as cited in Sheppard, 1995, p.28), stated that the essence of a company’s survival concerns its ability to get and maintain resources. The hypothesis helps explain why businesses should enter into exchanges with related parties and the manner in which the entity can maintain its survival. Pfeffer and Salancik (as cited in Sheppard, 1995, p. 28 - 29) conveyed that this survival occurs via demand management, namely the demands of interest associates upon which the entities rely on for resources

Managers generally consider the rivalry among competitors as a major source for deriving strategy. As explained by the Michael Porter it is a narrow view of competition. A set of other parameters should be evaluated, mentioned in article as five competitive forces, along with industry

When a certain point is reached regarding a company’s success, a set of different opportunities arise and partnerships may unfold. However, with every possible strategy available, risks and benefits also come into play; without discarding any of them beforehand, every option is a strong candidate until a final decision is made. In this case study we will analyze the current business strategy pertaining

Organizations must not overlook the environmental factors that are outside of the organization, as they can leave a detrimental imprint on the organization and their attempts to achieve various goals. According to the textbook, “Domain defines the organization’s niche and defines those external sectors with which the organization will interact to accomplish its goals” (Daft, 2013, p. 142). Some of the external sectors include human resources, technology, economic conditions, and financial resources (Daft, 2013). Changing the organization’s domain is a feasible strategy for coping with a threatening environment because it allows the organization to remain competitive when the market changes. Organizations are constantly shifting and doing so in a rapid manner, which makes it even more likely for organizations to become unstable if action is not taken when threating environmental factors occur. Although the process may be difficult, organizations should look into changing the domain to keep up with the speed and volatility of the market. Mergers and acquisitions are two plausible options for organizations to partake in to reduce uncertainty (Daft, 2013). An organization can either purchase an organization to further their operations or merge with another organization to form a more powerful and dynamic organization. For example, Sirius and XM Radio were rivals back in the day, but merged together to provide consumers with Sirius and XM Radio for their vehicles.

Strategic alliance is an agreement between two or more organizations to cooperate in a detailed business activity, so that each get benefited from the strengths of one an other, and gains competitive advantage. The formation of strategic alliances has been seen as a comeback to globalization and increasing doubt and difficulty in the business environment. Strategic alliances occupy the sharing of knowledge and expertise between partners as well as the reduction of risk and costs in areas such as relationships with suppliers and the development of new products and technologies. strategic alliance is sometimes equated with a joint venture, but an alliance may involve competitors, and generally has a shorter life span. Strategic partnership is a closely related concept. This article analyzes definition of strategic alliance, its benefits, types, process of formation, and provides a few cases studies of strategic alliances. This paper tries to synthesize the scope and role of marketing functions in the determination of effectiveness of strategic alliances. Several propositions from a marketing perspective about the analysis of alliance process are formulated. On the basis of the propositions, a framework is developed for future research

High level, intense rivalry may result with profit lost for the company. In most cases, new entrant barriers are high due to the intensity of rivalry (Porter, 2008).

Moving toward establishing win-win relationships in the context of strategic alliances, organizations are looking at total cost as a criterion, thus allowing win-win relationship building to lower total costs. Most public and private sector organizations are expected to use integrative (win-win) versus distributive (win-lose) negotiations, as they move away from adversarial and toward collaborative relationships with suppliers.

In other words, which strategies deliver the best performance hinges on the strength and interplay of the strategies employed by rival companies—not on some mystery "silver bullet" decision combination that players are challenged to discover.

One more strategy is Alliances ; There is a very small line between alliances and collusion . So it should be taken a good care from crossing this line . Collusion is when two organizations within the same industry work together in the same field mostly in order to make control on prices . Alliances is like joint ventures of the business . It's used in pooling the resources also in the detriment of different contenders not in the partnership .

To remain competitive a company must consider who their biggest competitors are while considering its own size and position in the industry. The company should develop a strategic advantage over their competitors’

 In general, manager’s look at competition has been too narrow. There is a broad set of competitors that need to be looked at, which are described in “The Five Competitive Forces That Shape Strategy” by Michael E. Porter. The model explains that there are several other forces in the competition for profits that the strategist should be aware of when forming a stagey. Those forces determine the profitability of the industry and are the most important to look at when you are forming a strategy. These five forces are are the “industry structure” model which contain: New Entrants, Suppliers, Buyers, Substitutes, and Existing Competitors.

The competitive environment : competition from the industry can impact a company’s strategy and operation. For example if a competitor release a new or similar product that threaten to steal market share, an organization must be ready to change in order to retain its

instance, product differentiation can create a protected domain for a focal organization with boundaries hard to penetrate by other competitors. However, in complex business environments interdependencies often are obscured from focal organizations so that individually coping with the dynamics of these environments becomes problematic (Emery and Trist, 1965). In these situations, collective strategies can supplement competitive strategies as a means of coping with the variation of interdependent environments (Astley and Fombrun, 1983a).

Porter’s Five Forces model is used to evaluate the degree of rivalry between competitors in a given industry through assessing the four forces that lead to this outcome. These forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products.

The model of the Five Competitive Forces was developed by Michael E. Porter in his book „Competitive Strategy: Techniques for Analyzing Industries and Competitors“ in 1980. Since that time the ‘five forces tool’ has become an important method for analyzing an organizations industry structure in strategic processes.