The increasingly rapid pace of globalization and the focus on disruptive innovations as the driving force behind expansion into the global market has made the competition levels in the latter incredibly high. To maintain a strong presence in the designated environment, companies need to seek new ways of enhancing their influence and building a competitive advantage. As a response to the challenging setting of the global market, the phenomenon of a strategic alliance (SA) emerged (Tjemkes, Vos, & Burgers, 2017).
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By definition, a SA is a collaboration toward a common goal between two or more organizations without being bound by relationships based on a partnership entity or any form of affiliation (Tjemkes et al., 2017). Although the specified approach does not create numerous opportunities for reinforcing the mutual trust between the involved parties, it provides an efficient method of handling market-related difficulties, particularly, rivalry, as the SA of Hewlett-Packard and Disney has exemplified.
At first glance, the specified organizations belong to two entirely different industries that have little in common with each other. However, on closer inspection, one will reveal that the specified solution reinforced the position of each organization in their designated markets. Although the SA between Disney and Hewlett-Packard is no longer in existence, Disney still uses the technology provided by its ally (Muthoka & Oduor, 2014).
The result of this creative business decision speaks for itself, with Disney producing the movies that fascinate with their astonishing visuals and clever integration of computer-generated imagery into a significant number of movies (Bourdaa, 2016). Given the drop in the popularity of traditional animation and the focus on computer-drawn images witnessed since the early 2000s, the support of a company such as Hewlett-Packard was essential for Disney.
Similarly, the latter also provided extensive assistance for Hewlett-Packard in the marketing domain. By showcasing the efficacy of the company’s technology with its astonishing animated movies, Disney played its part in the management of its SA with Hewlett-Packard efficiently (Muthoka & Oduor, 2014). As a result, both organizations retained their brand recognition and popularity even in the era of globalization, when the levels of global competition reached unimaginable proportions.
Since both organizations attained the expected results after creating a SA, it is reasonable to say that the specified decision was successful for Disney and Hewlett-Packard alike. Both companies increased their revenue after the SA expired and managed to cement their positions as corporate giants in the context of the global economy (Bourdaa, 2016). Specifically, Hewlett-Packard managed to attract content creators and invest in talent management as an essential tool for increasing the value of its workforce. However, one must admit that some of the expectations that both organizations set when exploring new opportunities in the digital economy did not return the expected results.
For instance, Disney buying the.go.com domain might have seemed a lucrative decision at the time, yet the company was unaware of the further steps to take after the domain acquisition, hence the financial loss (Martynov, 2016). Nevertheless, in the long term, the SA proved to be rather successful, even though minor issues occurred in the process.
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Although Disney and Hewlett-Packard belong to entirely different industries, their SA turned out to be a partial success because of the companies’ ability to utilize each other’s assets to meet the emergent needs of the global market. The case under analysis shows that a profound analysis of the possible outcomes is required; otherwise, both companies may make a string of regretful financial decisions. However, when guided by the willingness to assist each other in building a competitive advantage, the firms comprising a SA are likely to achieve the expected results.
Bourdaa, M. (2016). “I am not a tribute”: The transmedia strategy of “The Hunger Games” versus fan Activism. In The rise of transtexts (pp. 104-117). New York, NY: Routledge.
Martynov, A. (2016). Do strategic alliances, acquisitions, and R&D investments act as complements or substitutes? Foundations of Management, 8(1), 7-20. Web.
Muthoka, M., & Oduor, P. (2014). Effects of strategic alliances on organizational performances and their alliances in Kenya. European Journal of Business and Management, 6(34), 75-89.
Tjemkes, B., Vos, P., & Burgers, K. (2017). Strategic alliance management (2nd ed.). New York, NY: Routledge.