strategic alliances in the Indian commercial vehicle industry

Abstract

Corporate alliances are not new. What is new is the accelerating proliferation of strategic alliances. Clearly signalling that world has never appeared as hostile, bewildering and unstable as it does today. Many firms have come to rely on alliances as strategic necessities for sustaining competitive advantage and creating customer value. This is especially true in the high growth industries. Strategic alliances have been used for several reasons, generic reasons being as a defense, to catch up, to remain or to restructure. Our study basically concentrates on the strategic alliances for market access. As part of this project, we have tried to understand the key drivers for alliances in the Indian Commercial vehicle (Goods) industry. Our focus has been on one particular driver: market access. In order to understand the phenomena we have analyzed various frameworks used for alliances. Then we have applied these frameworks to the Volvo-Eicher case study (which was the most recent strategic alliance formed mainly for market access) to give practical insights in to the success factors and challenges faced by the alliances in the Indian Commercial vehicle (Goods) industry. Some of the key findings of the study are as follows:_ Strategic alliance is a competent method for market access as well as for business restructuring to stay competitive and create value for stake holders._ Fast changing Product Mix in line with the global trends as All CV segments getting redefined in line with the global CV Industry trends._ The alliance drivers in the Indian CV industry are risk sharing, scale economies, market access, fund availability, geographic access, marketing skills and regulatory freedom._ In the key success factors for alliances we see that establishing the ground rules takes the center stage in the success of collaborations, followed by ensuring equality, managing processes, setting task force, maintaining external focus and last but not the least choosing the right partner.