Strategic alliance for core competencies improvement in textile industries

Abstract

Strategic alliances are increasingly gaining popular for Textile companies to achieve fast and economical growth in today’s globalization. Strategic alliances are an important source of resources, learning, and thereby core competencies improvement. So managers have to make conscious decisions to develop certain competencies and in order to have all competencies that are required to be successful, firms look for strategic alliances and to leverage their partner firms’ competencies. However coordination with alliance partners is not easy; each part has its own reporting process and measures, and each brings its own perspective of what it wants to contribute to the alliance and what it intents to obtain from the alliance. Transcending these informational and motivational asymmetries, as economists would phrase it, requires an open, transparent process in which both sides clearly articulate their expected contributions and their desired outcomes resulting in a document that summarizes the theory of the strategic for the alliance. Developing an Alliance Balanced Scorecard (ABS) can mitigate the natural conflict between alliance partners. It include four-perspective framework: financial, strategic, operational, and relationship. This study has been made on how to apply the Balanced Scorecard on an alliance-making of 8 Textile companies as a result of a demand. We aim to provide a picture of what a prospective Textile Industries could look like, for the alliance-making in Iran, by developing an Alliance Strategy Map focused on the core competencies improvement. The work has been conducted as a qualitative case study at the Textile firms in Isfahan. The scorecard was developed by using analytic hierarchy process (AHP). We argue that results based on AHP analysis would help a company to make more informed strategic management decision concerning further investment for competences and key assets development, and outsourcing non-core assets and competences. This paper reports on the results of that empirical survey, the results show that: Maintain market position; Expanding their competencies; Gain access to complementary resources; Compete against common competitor; Reducing risk and uncertainty are important influences on alliance making for textile companies. Careful strategic planning and good partnership preparation are essential for alliance success.