Gaining Competitive Advantage Through Strategic Partnerships in the Supply Chain

Seminar paper from the year 2006 in the subject Business economics - General grade: 14 European Business School - International University Schloß Reichartshausen Oestrich-Winkel language: English abstract: 1. INTRODUCTION1.1 NATURE OF THE PROBLEM AND OBJECTIVEDue to the impact of globalization on our economy and the growing dynamic of marketscompetition between companies has changed over the last decades. Shorter productlife cycles the pressure on prices or the high costs of research and development forbetter products have made it difficult for today's companies to prevail against theircompetitors in the contest for profits. But also the challenge to meet the high levels ofcustomers' quality and service demand has weakened a company's ability to differentiateitself from its competitors. Especially small and medium-sized enterprises have toface this problem when competing against bigger companies. Thus these facts contributeto the implication of finding new and alternative ways of gaining a strategic andcompetitive advantage. One measure of doing so is to establish so called strategic partnerships by leaving thestage of company-versus-company competition. By this means the partners use synergyeffects and bundle their strengths to aim for growth and profit enhancement. Such strategicpartnerships have become very popular over the last years. This form of collaborationis used in particular by large multinational firms to develop new products and servicesand to enter new markets.Even though strategic partnerships are strongly increasing in number approximately 50-60% of them fail in achieving their original goals. Therefore it is important to analyzewhat strategic partnerships are how they work and whether they are more suitable forsome areas than for others. The goal of this seminar paper is to discuss to which extentstrategic partnerships can help companies to gain a strategic advantage in the supplychain. I will thereby focus