An analysis of structure and process of corporate alliance development using system architecture frameworks

Abstract

A strategic alliance has been one of the core methods for expanding the business of many corporations in terms of geographic presence, business domain, and technological scope. The strategic alliance includes many different types of partnerships, including licensing in and out, joint product development, minority equity investments, joint ventures, and mergers and acquisitions. These alliances involve many distinctive participants inside and outside a corporation and for this reason, the alliance-forging process and management tend to be quite complicated for systematic analysis. Therefore in this thesis I employ system architecture frameworks to analyze strategic alliances in a systematic way from a holistic viewpoint. I apply an object process methodology (OPM) to understand interactions among different participants during the process of forging alliances, analyze the upstream and downstream influences, and finally adopt a holistic framework to illustrate detailed interactions during the process. The alliance process basically consists of four distinctive phases: formulation, partner selection, negotiation, and management. Comparing the results with the DuPont case, I realized that the alliance management phase should be augmented for more comprehensive management. Strategic alliances and mergers and acquisitions are discussed in the corporate-level context. They have many driving forces in common at the level of corporate context, but in mergers and acquisitions the economic conditions are more critical components than others during a strategy- formulation phase.