PROJECT REPORT

ON
STRATERGIC ALLIANCE

SUBMITTED TO: SUBMITTED

BY:

MR.ASHOK SHARMA PRASHNI

SHER-01
(FACULTY: IMM) SAKSHI
JAIN-05
KARAN
KHANNA-44
MRINAL
ARNEJA-51
KANAN JAIN-55
PRATEEK SINGHAL-56
 WHAT IS STRATEGIC ALLIANCE?

• A Strategic Alliance is a formal relationship between two or

more parties to pursue a set of agreed upon goals or to meet a
critical business need while remaining independent
organizations.

• The alliance is a cooperation or collaboration which aims for a

synergy where each partner hopes that the benefits from the
alliance will be greater than those from individual efforts.

• The alliance often involves technology transfer(access to

knowledge and expertise), economic specialization, shared
expenses and shared risk.

• Of knowledge and expertise between partners as well as

reduction of risk and costs in areas such as relationships with
suppliers Strategic alliances involve the sharing and the
development of new products and technologies.
• Partners may provide the strategic alliance with resources such
as products, distribution channels, manufacturing capability,
project funding, capital equipment, knowledge or expertise.

CHARACTERISTICS OF STRATEGIC ALLIANCE

• Participants remain independent following formation of the

alliance
• Participants share benefits of alliance as well as control over
performance of assigned tasks
• Participants make ongoing contributions in technology, products,
and other key strategic areas

TYPES OF STRATERGIC ALLIANCE

JOINT VENTURES -
"Joint Ventures are agreements between parties or firms for a
particular purpose or venture. Their formation may be very informal,
such as a handshake and an agreement for two firms to share a booth
at a trade show. Other arrangements can be extremely complex, such
as the consortium of major U.S. electronics firms to develop new
microchips," says Charles P. Lickson in A Legal Guide for Small
Business.

OUTSOURCING-
“Outsourcing and globalization of manufacturing allows companies to
reduce costs, benefits consumers with lower cost goods and services,
causes economic expansion that reduces unemployment, and
increases productivity and job creation.”

AFFILIATE MARKETING-
Affiliate marketing has exploded over recent years, with the most
successful online retailers using it to great effect. The nature of the
internet means that referrals can be accurately tracked right through
the order process.

Amazon was the pioneer of affiliate marketing, and now has tens of
thousands of websites promoting its products on a performance-based
basis.

TECHNOLOGY LICENSING-
This is a contractual arrangement whereby trade marks, intellectual
property and trade secrets are licensed to an external firm. It’s used
mainly as a low cost way to enter foreign markets. The main downside
of licensing is the loss of control over the technology – as soon as it
enters other hands the possibility of exploitation arises.

PRODUCT LICENSING-
This is similar to technology licensing except that the license provided
is only to manufacture and sell a certain product. Usually each licensee
will be given an exclusive geographic area to which they can sell to.
It’s a lower-risk way of expanding the reach of your product compared
to building your manufacturing base and distribution reach.

FRANCHISING-
Franchising is an excellent way of quickly rolling out a successful
concept nationwide. Franchisees pay a set-up fee and agree to ongoing
payments so the process is financially risk-free for the company.
However, downsides do exist, particularly with the loss of control over
how franchisees run their franchise.

R&D-
Strategic alliances based around R&D tend to fall into the joint venture
category, where two or more businesses decide to embark on a
research venture through forming a new entity.

DISTRIBUTION RELATIONSHIPS-
This is perhaps the most common form of alliance. Strategic alliances
are usually formed because the businesses involved want more
customers. The result is that cross-promotion agreements are
established.

ATTRIBUTES OF STRATEGIC ALLIANCE

• Two or more companies develop a joint long-term strategy

• Relationship is reciprocal
• Partners’ vision and efforts are global
• Relationship is organized along horizontal lines
• When competing in markets not covered by alliance, participants
retain national and ideological identities

Stages of Alliance Formation

A typical strategic alliance formation process involves these steps:

• Strategy Development: Strategy development involves

studying the alliance’s feasibility, objectives and rationale,
focusing on the major issues and challenges and development of
resource strategies for production, technology, and people. It
requires aligning alliance objectives with the overall corporate
strategy.
• Partner Assessment: Partner assessment involves analyzing a
potential partner’s strengths and weaknesses, creating
strategies for accommodating all partners’ management styles,
preparing appropriate partner selection criteria, understanding a
partner’s motives for joining the alliance and addressing
resource capability gaps that may exist for a partner.
• Contract Negotiation: Contract negotiations involves
determining whether all parties have realistic objectives, forming
high calibre negotiating teams, defining each partner’s
contributions and rewards as well as protect any proprietary
information, addressing termination clauses, penalties for poor
 performance, and highlighting the degree to which arbitration
procedures are clearly stated and understood.
• Alliance Operation: Alliance operations involves addressing
senior management’s commitment, finding the calibre of
resources devoted to the alliance, linking of budgets and
resources with strategic priorities, measuring and rewarding
alliance performance, and assessing the performance and results
of the alliance.
• Alliance Termination: Alliance termination involves winding
down the alliance, for instance when its objectives have been
met or cannot be met, or when a partner adjusts priorities or re-
allocates resources elsewhere.

ADVANTAGES OF STRAERGIC ALLIANCE

1. Ease of entry into foreign markets

2. Shared risks

3. Shared knowledge and expertise

4. Synergy and competitive advantage

5. Enables firm to share high cost of the project

6. Provides learning opportunity

DISADVANTAGES OF STRATRGIC ALLIANCE

1. Alliances are costly - Joint ventures involve the investment of

managerial time resources in establishing the venture, managing
it, and resolving possible conflicts of interest between the
partners over the functioning of the venture.
 2. Joint ventures also expose the company to its partners, and the
unique technologies that it has are sometimes revealed to its
partner company, which could later become a competitor.

3. Strategic partners may often lead the company in directions

that serve the partner company better than they do the company
itself.

4. Conflict among participants.

5. Must share control over assigned task.

IMPACT OF STRATERGIC ALLIANCE IN SOME SECTORS

BANKING SECTOR EMPOWERING RURAL INDIA

3i Infotech announces Strategic Alliances to empower rural
India
ICICI Lombard, Airtel and Max New York Life to offer value-
added services through I-SERV Stores across 9 states in
India

Mumbai - January 07, 2009 - 3i Infotech, a global information

technology company, today announced strategic partnerships with
ICICI Lombard, Airtel and Max New York Life to offer a comprehensive
range of services to rural consumers under the I-SERV brand. This
announcement follows 3i Infotech’s commitment to constructively
harness the rural consumption through its recently launched I-SERV
initiative. Through I-SERV, consumers especially in remote rural areas,
will get an access to a range of value-added services that will improve
their quality of life.

Through this partnership, ICICI Lombard, Airtel and Max New York Life
will help 3i Infotech provide a bouquet of retail services in the general
insurance, telecom and life insurance sectors respectively. ICICI
Lombard will provide its entire suite of general insurance products like
Motor, Home, Travel and Health. Additionally, the company will also
make available specific Rural Insurance products like Cattle, Tractor
and Weather Insurance through these I-SERV stores. Airtel will use the
I-SERV retail stores for marketing, promotion and distribution of
various cellular services across this space. Max New York Life will offer
Max Vijay, a product designed specifically for the underserved segment
of the society, to meet the unique challenges of unpredictability in life
and their income flow.

3i Infotech is setting up 12,500 I-SERV stores across nine Indian states

including: Haryana, Uttar Pradesh, Madhya Pradesh, Gujarat,
Maharashtra, Goa, Andhra Pradesh, Tamil Nadu and Delhi. These stores
will deliver services related to Banking, Insurance, Mobile, Education,
Ticketing and Utilities.

Speaking on the occasion, Mr. Anirudh Prabhakaran, Executive Director

and President, South Asia, 3i Infotech, said, “We have taken care to
align with organizations having similar commitment to use technology
as a tool to enrich lives and to empower Rural India. The wide reach of
our I-SERV stores, coupled with the experience and expertise that
these organizations bring to this relationship, will benefit Rural India”.
“It’s a www, i.e. win-win-win for the Rural Consumers, the Partners as
well as the I-SERV stores,” he added.

Mr. Sandeep Bakhshi, Managing Director and CEO, ICICI Lombard, said,
“We aim to touch 10 million lives across rural India through various
health and rural insurance schemes as part of our financial inclusion
initiative. Our alliance with 3i Infotech for its I-SERV initiative, is part of
our effort in expanding the general insurance footprint through
government partnerships, NGOs and MFIs.”

Mr. K. Srinivas, Executive Director, East/West Hub, Mobility, Bharti

Airtel Limited, said, “At Airtel, we are committed to driving mobile
penetration in rural India through affordable products, value-added
services and easy to reach distribution. Our partnership with I-SERV is
another step towards our aim to reach customers in rural India to help
them experience the benefits of mobile telephony. This partnership, we
hope, will be creating another success story benefiting Rural India."

Mr. Rajit Mehta, Chief Operating Officer, Max New York Life Insurance
Company, said, “Max Vijay’, a one of its kind business model, has
revolutionized the way insurance is procured, sold and serviced. It has
been designed specifically for the underserved segment of the society
to meet the unique challenges of unpredictability in life and their
income flow. Our association with 3i Infotech is a part of our
concentrated strategy to strengthen our presence across the country
and help serve the underserved, to build a financially secure nation.
We are extremely happy to partner with 3i Infotech, which has
provided a unique platform through I-SERV to help us expand our reach
significantly amongst the rural, and less developed parts of the
country. Our technology driven distribution and service model makes it
an ideal ally in the rural transformation that I-SERV has undertaken.”

About 3i Infotech
3i Infotech is one of India’s leading IT companies and among the top 4
Indian Software Products Companies.* The Company provides software
products and IT services (Managed IT Services, Application Software
Development & Maintenance, Payment Services, Business Intelligence,
Document Imaging & Digitization, Operations Outsourcing (BPO) and IT
Consulting) for the Insurance, Banking, Capital Market, Mutual Funds,
Wealth Management and Government verticals. The Company services
customers in over 50 countries across 5 continents.

3i Infotech is SEI CMMI Level 5 compliant for Software Services, ISO

9001:2000 for BPO Services and ISO 27001:2005 certified for
Infrastructure Services.

* Source: Dataquest India has emerged on the global business map

and global giants are eager to enter India. In their rush to enter India,
global companies are entering into a slew of joint ventures and
strategic alliances. While some of these ventures are driven by
government regulations, most are driven by their need to lower risks.
In my previous article, I had mentioned that JV offers a lower risk
option to enter newer markets for Indian companies venturing abroad.
The same hold true for foreign firms entering Indian markets.

Notable JV of Recent Times

• Tata Motors & Fiat: The JV will manufacture cars from Tata &
Fiat stables. Tata Motors will also buy diesel engines for it cars
from Fiat, while Fiat will distribute Tata cars in Europe.
• Mahindra & Renault: This JV is the market entry strategy for
Renault. The JV will manufacture Renault’s Logan cars in India.
Renault will gain market knowledge - while Mahindra’s will learn
how to make good cars, and leverage its dealership network to
additional profits.
• Tata-AIG: This JV was created to take advantage of the new
government regulations on private insurance companies. Private
insurance companies need foreign collaboration for technical
know how. While the current regulations prevent foreign
insurance companies setting up a green field venture in India.
 Similarly other JV in this field are: ICICI Lombard, ICICI Prudential,
Bajaj- Allianze etc.
• Bharthi-Walmart: JV was primarily created by Wal-Mart’s desire
to enter India and the government regulations regarding large
foreign retail firms operating in India. This 50:50 venture with
Bharti will give Wal-Mart an entry into India ( a long awaited one
at that)

STRATEGIC ALLIANCE IN PHARMACEUTICAL COMPANIES

MAINZ, Germany and MUMBAI, India, April 24 /PRNewswire/ -- SCHOTT

AG and KAISHA Manufacturers Private Ltd., an Indian company,
announce the formation of a joint venture, SCHOTT KAISHA Private Ltd.
The new joint venture will manufacture primary pharmaceutical
packaging made of glass for the Indian market. The joint enterprise will
have operations in Mumbai and Daman.

SCHOTT and KAISHA have worked successfully for many years in a

buyer-supplier relationship. SCHOTT supplied the pharmaceutical glass
tubing to Kaisha for converting them into primary pharmaceutical
packaging products. KAISHA is considered to be a quality leader in the
Indian market with sales of 11 million euros in 2007.

The pharmaceutical packaging market in India is growing by

approximately 10 to 15 percent per year, particularly in the higher
quality segments, according to industry analysis. India has the largest
number of U.S. Food and Drug Administration approved plants outside
of the United States, for example. The joint venture will support Indian
pharmaceutical companies in upgrading products for international
markets by supplying pharmaceutical packaging at an international
quality level from the Indian production site. For this purpose, SCHOTT
KAISHA will build production capacity for StandardLine ampoules and
vials, which will be in production in the fourth quarter 2009.

"The joint venture combines KAISHA's local market expertise and

access to customers with the technological know-how of SCHOTT,"
explains Kairus Dadachanji, Managing Director of SCHOTT KAISHA.
The company expects to see a quick increase in manufacturing
capacity. The number of employees will grow in line with the
company's growth.

"Over the next 15 to 18 months, our Indian customers and the market
will begin to experience the positive effects of this cooperation,"
Dadachanji says. "Thanks to the close proximity to our customers and
our high standards for quality, SCHOTT KAISHA will support the
Indian pharmaceutical industry on the way towards reaching
international quality standards as a strong partner."