For a company to build the expertise needed to forge a competitive edge, it is of necessity that the company develops a dedicated alliance function. Dedicated strategic alliances offer efficient, effective and flexible avenues in accessing complimentary resources and knowledgeable skills that other companies employ to succeed in achieving and maintaining the much needed competitive edge. Strategic alliance function that healthy business relationship that is established by two or more companies to collaborate driven by mutual need to share uncertainty and risk in pursuing and achieving a certain goal. This strategy works well for entry in the market or to cover and shore up some weaknesses, improve competitive strengths, seize business opportunities and identify threats for a collective advantage (Dyer, Kale, & Singh, 2001).
Dedicated strategic alliance function serves companies with a great advantages and rewards. A dedicated alliance function will allow and offer a company a better opportunity to solve problems and operational hardships for they will be diversity of ideas and skills approaching problems and conflicts from diverse and experience dimensions. A dedicated alliance function plays a focal role for the company to learn and to leverage feedback and insight from previous and ongoing alliances which offer them the capital chance to be better. Dedicated alliance function helps companies build a better internal coordination which in turn helps the company towards achieving its goal owing to borrowing information from other alliancing companies (Dyer, Kale, & Singh, 2001).
With dedicated alliance function, a company opens up to external visibility making the company develop an extra business ‘eye’ to see things different but in a better perspective. Companies with dedicated alliance function can better manage knowledge and insight for the better of the company with more accountability and transparency. The dedicated alliance function systematically lays down a platform to articulate, codify, document, and share alliance experiences. Alliances compel companies to create methods for evaluating and measuring the performance of the alliances, such that they will benefit fully from them. Alliances help companies through creating well spelt guidelines to tackle specific issues and aspects forming internal legitimacy in setting strategic priorities of the company (Dyer, Kale, & Singh, 2001).
However, dedicated alliance functions are not that an easy to get thing. There are quite a number of challenges which may involve: identifying the right partners to get into alliances with, maintaining that alliance relationship and speaking in one voice for the competitive advantage of each other, striking a balance on how to benefit from the alliance with some companies having an upper hand in alliances than the others, trusting the partner company with sensitive and confidential business information, and even choosing a mode for entry in the alliance among other challenges (Dyer, Kale, & Singh, 2001).
At times, cost-justifying the dedicated alliance function is quite a challenge especially when a bigger company gets into partnership with a smaller company. But again, it is justifiable that even as the bigger company grows the smaller one, it may benefit from it with services and processes through outsourcing for instance, or through other means. Not all alliances are worth the hand, but it is always good to make meet two or more business minds who can share ideas, carry risks together and show each other the deep rich waters for business fishing. Though it may not sound logical in companies and management, selling the function would take a systematic insight to the managers in a way that they can see it as a benefit to the business. This would take seminars and forums in-house such that the function can be understood from the top fully. By so doing, this understanding will propel an initiative and a need to implement it (Dyer, Kale, & Singh, 2001).
Jeffrey H. Dyer, Prashant Kale & Harbir Singh, (2001), How To Make Strategic Alliances Work, Harvard University Press.