Business Organization: The Geographic Model Essay

1526 Words 7 Pages
Companies always face a limitation of financial resources; however, they have to keep investing in order to improve their profitability, market share and consequently the capital base. Such activities that the company does to improve the core value of their products is referred to as the core activities. As compared to the peripheral activities which add minimal value to the organization, core activities are strategic activities that provide competitive advantage for the business (Jacques, 2006). Most companies have decided to invest in the global market in order increase their market share. However, the global competition has become more complicated with the reduction of international communication and transport costs. New markets …show more content…
For that reason, companies should always be cautious in making the decisions pertaining partnerships. The alliance would only be referred to as strategic if it meets the following qualifications;
Critical to a business objective
The business objective may be in line with increasing revenue, cost reduction and growth. The alliance should ensure that there is an increase in the revenue base even after the break of the alliance. Equally, the alliance through the join investment should ensure that cost effective measure are clearly achieved. Finally, the alliance should be a gate pass to the business to exploit the opportunities that had never been exploited before (Wakeam, 2003).
Core competency The other way to prove that the alliance is strategic is by ensuring that it ensures the organization attains competitive advantage. So as to build experience and skill, there is a need to join up with an experienced partner. The partnership should be a joint team work between the two organizations to elevate the standards of each other. The companies should openly share their objectives; arrange their governance in a way such that all levels of the organization structure are promoted and they work towards achieving minimal competition in the future (Wakeam, 2003).
Block competitive threat The organization should jointly work towards curbing threats that would cause harm to any of them. The companies should also work at identifying general risks and ways through which they can

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