International Business Management (Strategic Alliances types) Essay

International Business Management (Strategic Alliances types) - Essay Example Features responsible for success of an alliance are managing co-ordination and trust between partners. Trust develops through various processes as commitment, bargaining and interaction. The alliance must also develop trust between its vendors and customers, this is relational capital. Trust among the customers raises the alliance reputation capital, consequently resulting to alliance success. Alliances are founded on contract and not friendship bases, therefore, each partner is expected to be committed and display its trustworthy. The alliance maintenance must focus on trust between the parties involved and the degree of adherence to set rules and regulations. The partners have the advantage to learn from each other without exploiting each other through resources or capabilities. Knowledge diffuses takes place from one firm to all the alliance parties. In each alliance well defined, rules are set aside to protect the parties from exploitation by the giant partners. The general types of strategic alliances are Joint venture, non-equity alliance, equity strategic alliance and global strategic alliance (Gomes, 2011, p. 53-47). Joint venture alliance involves a long term investment between two or more organisation which benefits all partners. The investment includes funds, resources and facilities which are contributed equally by the associated companies. A classic example of the joint venture is Caltex Company that is formed between the California Standard oil and the Texaco Company earlier known as Texas Company (Mitchell, 2013, p. 77). The petroleum company products are available in more than 60 countries in the Asia, Middle East, pacific region and the Southern Africa. Caltex is a global organisation having its product distributed and consumed in many parts of the world. The companies combined their resources together to create a separate business. Chevron had plenty oil wells but