Reference no: EM131248747

Strategic alliances are voluntary arrangements between firms that involve the sharing of knowledge, resources, and capabilities with the intent of developing processes, products, or services. The use of strategic alliances to implement corporate strategy has exploded in the past few decades, with thousands forming each year. As the speed of technological change and innovation has increased firms have responded by entering more alliances. Globalization has also contributed to an increase in cross border strategic alliances. Strategic alliances may join complementary parts of a firm's value chain, such as R&D and marketing, or they may focus on joining the same value chain activities. Strategic alliances are attractive because they enable firms to achieve goals faster and at lower costs than going it alone. In contrast to M&A, strategic alliances also allow firms to circumvent potential legal repercussions including potential lawsuits filed by U.S. federal agencies or the European Union. To affect a firm's competitive advantage, an alliance must promise a positive effect on the firm's economic value creation through increasing value and/or lowering costs. Strategic alliances create a paradox for managers. Although alliances appear to be necessary to compete in many industries, between 30 and 70 percent of all strategic alliances do not deliver the expected benefits, and are considered failures by at least one alliance partner. Given the high failure rate, effective alliance management is critical to gaining and sustaining a competitive advantage, especially in high- technology industries. When making the business case for an alliance, the expected benefits of the alliance must exceed its costs. Read the following and provide a response to the questions below. Alliances and acquisitions can sometimes lead to less access or higher prices for consumers. Com- cast bought NBC Universal (from GE). When one content provider and the Internet access provider are the same, will this lead to some content being favored over others on the Internet? For example, will Comcast want to send Universal movies (which it owns) with faster download capabilities than it sends, say, a Harry Potter movie from Warner Brothers (which it doesn't own)? If you were a Comcast executive, would you want to favor the speed of your own content delivery versus other content providers, including Netflix?