The components of a competitive strategy are the product benefit to the customer, the company’s targeted market, and the other competitors within this market. For a company to be successful in a competitive strategy, they need to understand these components to understand their products and the interactions it has with the customer. It will also be vital for the company to understand the customers’ needs and challenges. Understanding these will provide the company with the information needed to make the best-informed risk/benefit analysis in making decisions with the goal of building a great customer relationship with the ultimate goal of being indispensable to their customers.
A strategic alliance is when two or more companies decide to work together toward a common goal. During this alliance, these companies remain their own entities and it is vital for each company to agree that they are aligned in their shared goals and communicate with each other. An example of a strategic alliance would be an oil refinery working together with a catalyst manufacturer to produce high octane gasoline; both companies remain independent but, are working together to provide a product.
What are the critical factors that are necessary in a joint venture to increase the likelihood of success?
Agreement, flexibility, development, and alignment are some of the critical factors that are necessary in a joint venture to increase the likelihood of success. These factors all contribute to the benefit of a joint venture by forming an agreed upon relationship between two companies, where they are aligned through shared goals and strategies, are flexible with each other strengths and organizational practices, and continue to develop a growing and hopefully profitable relationship with each throughout the agreed duration of the joint venture.