What are the best possible outcomes of a strategic alliance between apparel industries?
In earlier times, businesses could be managed in isolation. This has changed rapidly, and now decisions made by one business directly, or indirectly impact others. Businesses of today are built on a complex network of information, interaction, and change. This evolving nature of business has led back to one of the most fundamental aspect of business - relationships. In order to be more successful, companies need to take advantage of the strength of other organizations. Strategic alliance between two or more organizations is vital to succeed in today's client driven and networked economy.
Does working together mean success?
The alliance mainly aims to provide mutual benefits, improve their competitive positioning, gain entry into new markets, share the cost and risk of new development projects, and complement their critical skills. Developed and propagated as formalized inter organizational relationship, the alliance seeks to achieve organizational objectives in a better way through collaboration, rather than competition. The companies aspire to work in collaboration, facilitating global sourcing in the textile value chains.
Textile & Apparel industry benefits:
Strategic alliances reflect the desire of two businesses to achieve their independent business objectives cooperatively. Apparel industry consists of value chain influenced by buyers, and three lead firms; marketers, retailers, and manufacturers. Strategic alliances would pave way for apparel industries to move up the value chain, developing its capacity.
Easier to access target markets:
Introducing a product in a new market can be challenging for any business. Furthermore, it is also costly and complicated exposing the business to entrench competition, operational hurdles, and hostile statutory regulations prevailing in that region. Opportunity costs and direct financial losses due to inappropriate market conditions may also occur.
Going in for a strategic alliance with a well established business in that region will overcome these issues, and help the organization to minimize its entry cost in the new market. Companies can receive orders from branded retailers, designers, and manufacturers. Networks would be developed, proving crucial for the transition of full production.