Business networks in achieving competitiveness in international business

Business networks

Globalization of the world economy contributes to changing of established economic systems that is why process of technology innovation and movement of capital is accelerating, labor mobility is increasing and companies’ collaboration is changing. Organizations had competed with each other in for resources, provides and markets.
Collaboration of organizations is one of the ways to manage the difficulties and to solve problems in a modern business. More and more companies form strategic alliances cooperating with each other.

Strategic alliances are trust-based long-term symbiotic relationships between firms that make every partner achieve strategic goals more effectively, coordinate common resources and optimize transaction costs. Alliances may have different goals. They might be marketing, technological and hybrid.

Cooperation in international strategic alliances provides a wide range of opportunities for partner companies such as access to the resources and to new markets, reduce uncertainty, gaining of knowledge and experience. International markets are becoming essential for company’s growth through strategic alliances.

Some researchers believe nowadays companies feel the pressure of two competing factors and have to accommodate and function in a changing environment. According to G. Hamel and I. Doza, all companies participate in global race for international markets and in technical race for new equipment and information technologies. During technical race organization make resources and build capacity, which may be used to manage new industries and future markets.

Strategic alliances and symbiotic relationships are advantages in crisis of the economy. Organizations can reallocate resources and share costs. Moreover, it is better to be prepared for the future growth.
According to Michael Porter, sustainable competitive advantage is a combination of activities that would be hard to copy. He has developed a model of market forces that include suppliers, consumers, competitors and organizations that produce substitute products.

B. Gomes-Casseres identifies as a core of collectively competitive, as an opportunity of reinforce avoiding traditional antimonopoly policy. There are synergies between two organizations. Effectiveness is achieved to move companies rapidly to new market and technological frontiers.

Companies win when they are included at the alliance. They save on new product development and scale of production. Effectiveness of synergy between several organizations consists in improving the quality of the product and in reducing the cost of the product to the consumers.

B. Gomes-Casseres have analyzed dynamic growth of international partnership over the 1970–1993 period. Alliances in IT industries have the largest increase from the absence in 1970 to 250 in 1993. It is important to mention significant growth in biotechnology and in the chemical industry. There was a slight reduction of international alliances in 1990 and 1991. Since then, there has been commensurate growth in all high-tech industries.

The automotive industry, trade and refining are under enormous pressure and joint ventures are very common in these industries. They are also common in innovation industries such as medicine, biology and IT industries.
General Motors and Volkswagen have several dozens of joint ventures. Largest international oil and gas companies are exporting almost 80 percent of their product due their joint ventures.

Cooperation and alliances imply the sharing of knowledge and the joint creation of new value for consumers. Cooperation provides opportunities for institutional development. Partnership demands the interaction of stakeholders in innovative activity and achieving goals in emerging markets.

emerging markets

Nowadays, managers understand that the core of competitive advantages is partnership and cooperation. Combined efforts and pooled resources will optimize processes and achieve better results. Strategic alliances provide new international markets and opportunities to improve technologies.

Companies become more competitive forming strategic alliances. The main advantage is logistics and costs minimization. Moreover, companies gain access to a new market and consumers, which they did not have an opportunity to work with before, and to resources, knowledge and new information.