Contreras, R. WK 4 Academic Article

Technology Determining Corporate Alliances?

According to an article by (Barbarinsa), the leading cause for corporate alliances in today's market is a discontinuity of technology (2011).  In the article (Barbarinsa) contends that the rapid growth and changes in technology present organizations with limited options to keep up in the marketplace (2011).  He illustrates his point through use of examples like Blockbuster and Borders who failed to keep up with technology trends which resulted in their bankruptcy due to their inability to compete with competitors such as Netflix and Amazon (2011).  The article reinforces (Gomes-Cassares's) "Logic of Collaboration" through developing the case that many technological alliances are formed as a result of either a "corporate learning" or "market positioning" goal for each organization (1993).  Barbarinsa's article also clearly provides examples of how companies have managed those alliances through the examination of Gomes-Cassares's evaluation of partnerships and alliances (1993).

Product development has served as a significant focus for many corporate alliances formed in the last twenty years.  For example, the alliance created between Mobira and Nokia outlines the development of a standardized mobile product (Barbarinsa, 2011).  Prior to the alliance, there was no mobile communication standard internationally recognized (2011).  The two companies engaged in product exchange in order to utilize each others technological strengths to advance in the market. 

This merger also shows the phases of managing an alliance.  Both companies had a similar goal which is why they selected one and other for the partnership while also having the expertise in technologies needed.  They had clearly negotiated roles, and through their working relationship trust was forged (Gomes-Cassares, 1997).  As a result, after monitoring the partnership over many years the companies merged and became Nokia as it exists in the marketplace today (Barbarinsa, 2011).  Additionally, the alliance between Mobira and Nokia exemplify a partnership formed to gain presence within the international marketplace much like Walmart's alliance with Bharti.  Walmart wanted in to the Indian retail market and Bharti wanted access to Walmart's infrastructure and technology (Bose, 2012).  Mobira and Nokia were able to standardize their product internationally securing themselves as a leader in the industry.

A more recent example using Gomes-Cassares' "Logic of Collaboration" (1997) in relation to "market positioning" (1997) is VMware and its alliance with several software companies.  VMware with its expertise in virtual technology was selected for its technology in order to create a streamlined system for data storage.  The result of the alliance has led to the cloud technology that is booming in today's market (Barbarinsa, 2011).  Each companies goals were to create an application that was user friendly, easily available and secure.  VMware had the know how and the software companies wanted a standardized application that they could each benefit from in the market and secure their dominance in the area (Barbarinsa, 2011).  This is yet another perfect example of "market positioning[,]" (Gomes-Cassares, 1997) the software companies had the capability and know how to develop the product, but due to the time constraints to secure dominance in the market they needed a company with more advanced technology that could quickly develop the product using their additional resources.  The "alternatives to collaboration" likely served as viable options especially for each company individually however due to the fluid and rapid developments of technology all other options would lead to significant time delays which could result in a loss as an industry leader in the market.

The consideration of forming an alliance is not one that is entered into lightly, but Barbarinsa, makes an excellent point that technology can serve as a driving force pushing alliances forward in this new technological era.  As technology continues to advance at warped speed it is likely that we will continue to see companies seek out alliances out of sheer desire to survive.

References

Babarinsa, O. (2011) Technology discontinuity as motivation for corporate alliance. S.A.M. Advanced Management Journal, 76(1), pp. 4-12.

Bose, I. (2012). Wal-Mart and Bharti: transforming retail in India. Asia Case Research Centre. pp. 1-18. Retrieved from: http://cb.hbsp.harvard.edu/cb/web/he/product_view.seam?R=HKU845-PDF-ENG&T=EDC&C=PURCHASED_MATERIALS&CD=14350242&CS=dc9dbed76c51767ecd7293635200de0c.

Gomes-Casseres, B. (1993). Managing international alliances: a conceptual framework. Harvard Business School. pp. 1-20.