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You will prepare and submit a term paper on Liability of Foreignness and Regionalism. Your paper should be a minimum of 3750 words in length.
You will prepare and submit a term paper on Liability of Foreignness and Regionalism. Your paper should be a minimum of 3750 words in length. There are two main advantages in forming alliances. The first is to obtain the latest technology and gain market advantage. The second is to save on expenditure and investment required to increase sales and revenue. A corporate strategic alliance can be defined as “a relationship between two or more firms involving the sharing of complementary disciplines, technologies, products, organizational structures, marketing channels and/or financial resources” (Nester, 2003. The foreign company stands to gain in forming an alliance. Lack of familiarity with the culture of the host country, understanding and complying with the laws of the host country, the distance between the home country and host country, the unwritten laws prevailing, the political relationships between the two countries or regions, dealing with bureaucracy, corruption and level of transparency are some of the problems faced. A strategic alliance is not necessary, but if problems of the above nature exist it is better to have one. It is unavoidable if prevailing law in the host country deems it necessary.
Porter’s five force model like supplier power, buyer power, an obstacle to entering, competition, and risk of substitutes etc. are also very effective in this regard. Here supplier power means the ability of the suppliers to enhance the price of commodities. But on the other hand, buyer power refers to the ability of the buyers to bring down the prices to a certain extent for enhancing the buying power. A threat of competitors’ entry means bringing down the profit made by the existing entities with the entrance of new firms. . Competition or rivalry another key factor of Porter’s model. Threat regards to the introduction of substitute products means the chance of reducing the usage of the own products.
