IMPORTANT NOTE: The questions must be addressed in its full context. These questions are an opportunity to go outside the box to demonstrate your analytical, integrative, problem- solving and critical thinking skills using the knowledge acquired in your readings. As a result, it is very important to pay close attention to the questions and be able to conduct your discussions in the context of your question.  – Please keep this in mind when you complete this assignment.You must expand your ideas further. Analysis must be deep and very instructive. ANSWER THE FOLLOWING QUESTIONS. Each question should be answered in at least 300 words. Quality of content and use of course and outside-of-course resources to support your position or analysis. The answers should not be in the form of essay, just straight to the point- Work must be original and cite your sources.Please be sure to answer the question completely but specifically in well-written complete sentences. Use the attached lecture  to help you answer these questions, and conduct your own researchQuestion #1:Strategic RelationshipsDiscuss the major factors that encourage the formation of strategic partnerships between companies.lecture.docxUnit 4: Lecture
Strategic Relationships
Marketing relationships are important avenues to building strong bonds with
customers. It is important to offer user customers superior value through
collaboration of the organizations involved in the process. It is also important
to recognize that collaborative relationship strategies may radically transform
traditional buyer-seller and competitor structures in unexpected ways.
This unit, we will explore how business and marketing strategies involve more
than a single organization. We will examine the nature and scope of the
strategic relationships among various partners. Then we will explain different
kinds of relationships among organizations followed by a discussion of several
considerations that are important in developing effective interorganizational relationships.
To get started, please read Chapter 7, Strategic Relationships in order to
understand the concepts that we will be discussing.
Rationale for Inter-organizational Relationships
Several factors create a need to establish cooperative strategic relationships
with other organizations to achieve tactical objectives. The opportunity
present in many markets today is that organizations can couple their
competencies to offer superior customer value. Even when partnering is not
required, a relationship strategy may result in a much more attractive value
Coping with diversity involves both the internal organization and its
relationships with other organizations. Environmental diversity reduces the
capacity of an organization to respond quickly to customer needs and new
product development. Organizations meet this challenge by (1) altering their
internal organization structures, and (2) establishing strategic relationships
with other organizations.
Technology constraints impact industry giants as well as smaller firms. Small
companies with specialized competitive strengths are able to achieve
impressive bargaining power with larger firms because of their high level of
competence in specialized technology areas.
Market targeting consists of evaluating and selecting one or more segments
whose value requirements provide a good match with the organization’s
capabilities. Companies typically appeal to only a portion of the people or
organizations in a product-market, regardless of how many segments are
Organizational relationships are also important in gaining access to
markets. International strategic alliances are used by many companies
competing throughout the world. Information technology makes establishing
organizational relationships feasible in terms of time, cost, and effectiveness.
Collaborative relations may include shared activities such as product and
process design, cooperative marketing programs, applications assistance, longterm supply contracts, and just-in-time inventory programs. The costs and the
benefits of partnering with customers, suppliers, and competitors should be
considered before there is collaboration.
Forms of Organizational Relationships
The Types of organizational relationships that may be formed by a firm are
shown in Exhibit 7.3 (page 196). Included are supplier and customer
partnerships (vertical relationships), lateral (horizontal relationships), and
internal relationships. Relationships can be both interorganizational (between
organizations) and intraorganizational (internal relationships). Supplier
relationships include those companies providing goods and services, some of
which may be regarded as strategic suppliers or outsourcers, because they
impact on the focal firm’s ability to deliver value to its customers. Customer
partnerships include both intermediate customers such as distributors and enduse customers (consumers of the product). Lateral relationships may be with
competitors, unrelated companies at the same stage of the value chain, or
governmental organizations. Internal Partnerships include relationships with
strategic business units, functional departments, and employees within the
A useful way to examine organizational relationships is to consider whether
the tie between firms is vertical or horizontal. The focal firm may participate in
both vertical and horizontal relationships. We first examine vertical
relationships among organizations, and then, strategic alliances and joint
ventures, followed by internal relationships (source: David Cravens and Nigel
Piercy, Strategic Marketing, 10th edition)
Moving products through various stages in the value-added process often
involves linking suppliers, manufacturers, distributors, and consumer and
business end users of goods and services into vertical channels. Functional
specialization and efficiency create the need for different types
of organizations.
Vertical relationships also occur between producers and marketing
intermediaries. These value-chain relationships provide the producer access to
consumer and organizational end users. An example of relationships is while
traditional Japanese life insurers employ sales employees who call on customers
at their home to sell policies and collect premiums, AFLAC established
a broad-based distribution network of corporate partners. For more
information, click on AFLAC
(Links to an external site.)
An important issue is selecting the customers with which to develop
relationships, since some may not want to partner and others may not offer
enough potential to justify partnering with them. Relationship strategies need
to recognize differences in the value of customers to the seller as well as the
specific requirements of customers. Relationship strategies include strategic
alliances, joint ventures, and internal partnering.
A strategic alliance between two organizations is an agreement to cooperate to
achieve one or more common strategic objectives. Each organization’s
contribution to the alliance is intended to complement the partner’s
contribution. The rational for the relationship may be to gain access to
markets, utilize existing distribution channels, share technology development
costs, or obtain specific skills or resources.
Joint ventures are agreements between two or more firms to establish a
separate entity. While joint ventures are similar to strategic alliances, a
venture results in the creation of a new organization. Lack of success in the
management of joint ventures often reflects a lack of adequate attention to
planning and executing the launch of the venture.
The success of internal relationships requires developing strong internal
collaboration that cuts across functional boundaries. The relationship strategy
requires attention to the internal structure. The starting point is building a
collaborative customer-driven internal culture.
Managing Inter-organizational Relationships
Forming and managing effective collaborative partnerships between
independent organizations is complex, so we need to look further into the
process of developing effective relationships. Key elements of this process are
indicated in Exhibit 7.4 (page 205). The objective of the relationship is first
considered, followed by a discussion of several relationship management
guidelines (source: David Cravens and Nigel Piercy, Strategic Marketing, 10th
While collaborative relationships are increasingly necessary, the available
concepts and methods for managing these partnerships are
limited. Comprehensive planning is critical when combining the skills and
resources of two independent organizations to achieve one or more strategic
objectives. The capability to manage effectively through partnerships does not
exist in all organizations.
While collaborative relationships are increasingly necessary, the available
concepts and methods for managing these partnerships are limited. Successful
partnerships involve trust and respect between the partners and a willingness
to share with each other on various self-interest issues. Strategic relationships
among companies from different nations are influenced by cultural
differences. The capability to manage effectively through partnerships does
not exist in all organizations.
Specific collaborations and alliances may come to the end of their useful lives
when the relationship fails to deliver value or the market opportunity
declines. Effective management of strategic relationships should pay attention
to managing the termination of alliances when necessary. Early preparation
for the eventual end of the alliance is recommended. Failure risk in alliances
and potential losses from failures mandates careful attention to the costs and
processes of ending strategic relationships when this becomes a more attractive
option than continuing.

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