International Alliance Case-Writing Assignment Example | Topics and Well Written Essays - 1500 words

International Alliance Case-Writing - Assignment eccentricAlliances can be equity bonds or non equity alliances specifically, joint ventures may involve a vertical control from a parent entity (Hennart J., 1988). Prior experience and robust infrastructure are considered during alliance participator selection. Success of a corporate alliance is measured in terms of the value addition imparted callable to the combined activities of the parties involved. This is come finishedd through a well defined Alliance Strategy which involves a proper design, reserve monitoring, governance and performance management processes. I would like to elaborate on the KLM and Northwest Alliance, which was the initiative integrated airline alliance in history. The association between the two airlines began in 1991 with joint principle sharing and went on to form a major Trans-Atlantic Joint Venture. A peculiar singularity of this joint venture was the absence of a new legal entity. KLM and North west entered into an Open Sky balance and Anti-trust immunity in 1993 and thus formed a globally renowned unit. As is true with close alliances, this contract was designed specifically to support and strengthen the competitive advantages of the cooperators (Liana M., Nicoleta B and Dana P., 2009). KLM Royal Dutch Airlines, embodied in 1919, was based turn up of Amsterdam. KLM was a regional leader but wanted to expand its mesh topology to many cities in the US. A company cannot be solely viewed as an individual unit rather, it is mental object to interactions with various other bodies, constantly striving to foster good inter-organizational ties and relations. Around the late 1980s, due to liberalisation and de-regulation of markets, free competition prevailed in the European airline industry. KLM realized the need to collaborate and co-operate with airlines based out of other countries, in order to maximize their global connectivity. KLM invested in a detailed process of par tner selection and finally zeroed in on Northwest Airlines due to its international reputation, vast experience with rider as well as cargo transport and its dominance in the US market. A grueling proposal was made to develop collaboration between an American and a European carrier to achieve competitive costs, expansion of their network and greater revenue. Northwest Airlines began its operations in 1926 and was a medium-sized airline carrier, management more on flights in the United States to Asia, but rarely to the European regions. Despite their stronghold in the US regions, Northwest had, by then, earned poor points for service quality and did not have the coin or infrastructure to individually scale up on mega proportions. Northwest realized the need to research wider opportunities in Amsterdam, the European sector and expand their operations accordingly. Contrary to KLM, Northwest did not go through a very fine partner selection process and chose KLM as its alliance partn er owe to their pre-existing ownership in Northwest. It is acknowledged that the main theoretical motivations for the formation of joint ventures include step-down in transaction costs, strategic competitive positioning or market power and a gather up for organizational learning and knowledge development (Gulati, 1998). It is on a similar model that the two airlines, KLM and Northwest, came into an alliance in a bid to enhance