Implications of the strategic alliance between Bharti Airtel and IBM for African market

Abstract

Strategic partnerships or alliances between organizations are becoming increasingly popular these days as a way to extract greater value from the marketplace. Companies are searching for innovative ways like such alliances to enhance profitability, handle uncertainty and build competitive advantage. In recent times, alliances have become an important part of the competitive and growth strategies of most companies. With the recent phenomenon of relationship marketing in picture the focus has increased on the use of inter-firm relationships or strategic alliances to delivering a total service package to the consumer. Alliances help firms strengthen their competitive position by enhancing market power (Kogut, 1991), increasing efficiencies (Ahuja, 2000), accessing new or critical resources or capabilities (Rothaermel & Boeker, 2008), and entering new markets (Garcia-Canal, Duarte, Criado, & Llaneza, 2002). As companies rush to leverage the potential value of alliances, they often overlook the potentially adverse effects of poor alliance partner selection. Thus, strategic alliances help firms concentrate on their core competencies- what they are good doing at and leverage on the strengths of the partner firm as well. Our project begins with the literature review available over the internet, research papers and other management papers. The project involves examples of various famous successful and unsuccessful strategic alliances across the globe to understand the intricacies of such partnerships. We then use a few frameworks to evaluate the Bharti Airtel- IBM alliance in India and South Africa. In the end we identify the factors that led the alliance to succeed in India and the way forward for South African market and applied the learning from various literature works for the successful implementation in the new market.