The Nokia Microsoft Alliance in the Global Smartphone Industry
Lessons Learnt from Experience
Because of the advancement in technology and the financial crisis in the global market, organizations have been forced to modify their business strategies. Strategic alliance is considered to be among the best strategies for increasing the value of shareholder regardless of the challenges faced towards full implementation (Vanpoucke & Vereecke, 2010 p. 6716). From the Nokia-Microsoft Alliance, there is a lesson that, companies should prepare to partner with others in order to achieve an extended haul. Organizations that are looking towards making strategic alliances should invest in partnerships that offer long term benefits to all the involved parties. It should also make sure that both parties are committed for a considerable duration of time. In most occasions, market share leaders in a particular field may not be the most ideal for strategic alliances since most of them do not usually put all their weight behind the partnership. Organizations should look for companies that can offer long lasting benefits.
When forming an alliance, it is important to build up evaluation criterion and implementation plan well in advance. Besides, it can be learned that there is no partnership that can last forever. Companies should have proper planning when entering into an alliance agreement since it helps in keeping the union in check. On the other hand, it will also foster better relationship because each party will take the relationship seriously. Companies in a strategic alliance must be ready for an impending exit sometime in the future. Partnership offers the potential of working directly with one another and put up interoperability of technology. This can be beneficial to the entire unit. There may be challenges that might hinder the maximum growth and keeping an eye for an impending exit, a company is likely to realize its objectives.
Culture plays an important role in the management of strategic alliances since it determines the results of performance. There are certain countries that have a high cultural context. In order to ensure successful strategic alliances, culture should be established as an indispensable component of the organization. If that culture is not given attention, alliances will not be able to solve arising problems and even negatively impact rational-decision making, thereby harming long time planning for development.
What could have been done better
For the success of the Nokia-Microsoft Alliance, there was need for the two organizations to clearly communicate their purposes to those involved. So much time was spent on discussions about rumors and fears of the partnership. It was viewed by many as a chance for Microsoft to redeem itself as the leading software manufacturers. However, others also saw it as a chance for Nokia to re-affirm itself as the leading global mobile manufacturer. Lack of clear communication threatened the success of the partnership. It was necessary for both parties to effectively communicate the desired objectives of the alliance.
A successful strategic alliance should have leaders who are united, proper coordination and resource fluidity. Leadership unity is the ability of the management to make bold decisions quickly without being bogged down in win-lose politics. Coordination refers to linking, synchronization, meshing or alignment of actions that are part of the strategic union. Proper coordination ensures that there is order in the efforts of the involved parties and helps in the combination of resources of each partner in a productive way. Resource fluidity entails the ability of the companies to re-configure business system and re-deploy resources within a short time.
Implementation of the Solutions
In strategic alliance, partners are required to engage in coordination efforts so as to manage task interdependence that flows from one division of labor or production technologies that are used in handling uncertainties that may come up from external environment or internal tasks. Alliances should be formed on anticipated synergistic benefits of complementarities since it creates several hiccups. Higher level of complementarities is an implication of a more complex division of labor because the task of every player becomes specialized. This enhances interdependence, thus, the need for greater coordination. Proper coordination ensures that there is compatibility between the involved parties. This will further ensure the success of the alliance and benefits to all partners on equal measures (Gulati, Wohlgezogen & Zhelyakov, 2012 p. 546).
In strategic alliances, both parties should embrace leadership unity since it can facilitate faster decision making and commitment to outlined objectives. The central theme of the alliance must be mobilized. Through leadership unity, leaders from both companies will have the courage to come up with tough decisions and the compassion to be attentive to the needs of the other partner (Doz & Kosonen, 2008, p. 96). Strategic alliances should be properly funded. Each partner is required to be honest about its time and financial commitment to the joint venture. Fluidity of resources ensures the easy and faster transformation of business models as well as activity system. While reporting on how the resources were used in the company, the financial reports can be customized to suit the needs of the partnership. In the same way, it does not have to go by the standard reporting formats for every organization in the alliance. This will enhance transparency and confidence of working together (Doz & Kosonen, 2008. P. 96).
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Doz, Y., & Kosonen, M. (2008). The Dynamics of Strategic Agility: NOKIA’S ROLLERCOASTER EXPERIENCE. California Management Review, 50(3), 95-118.
Gulati, R., Wohlgezogen, F., & Zhelyazkov, P. (2012). The Two Facets of Collaboration: Cooperation and Coordination in Strategic Alliances. Academy Of Management Annals, 6(1), 531-583. doi:10.1080/19416520.2012.691646.
Vanpoucke, E., & Vereecke, A. (2010). The predictive value of behavioral characteristics on the success of strategic alliances. International Journal of Production Research, 48(22), 6715-6738. Doi: 10.1080/00207540903307623.