1

Building strategic alliances

Dana Poklepovic

Students Worksheets
Aims
toimprovespeakingskillsinthe
contextofstrategicalliances
topractisereading
comprehensionskills
developvocabularyandidiomsin
thecontextofstrategicalliances
topractiselisteningforspecific
information
todescribetheoutcomesofan
action
todevelopdecisionmakingskills
inEnglish
Tasks
discussbusinessleaders
quotationsaboutstrategic
alliances
readaninterview,relay
informationaboutalliancesand
matchsentencehalvesonkey
concepts
Completevocabularyactivities
withtheaidofthewrittentext
watchavideoaboutareal
strategicalliance
holdadecisionmakingmeeting

Leadin
Formtwogroups.Readthequotationassignedtoyourgroup.
Doyouagreewiththisquotation?Why/Whynot?
Shareyourtextwiththeothergroup.Whatarethesimilaritiesanddifferences
betweenthetwoquotations?

Beforereading
1. Whatkindofalliancescanyouthinkof?Tellyourpartner.
2. Inyouropinion,whatisimportantforanalliancetosucceed?

Reading
Abusinessjournalhasinterviewedanexpertinstrategicalliances.Readthearticleonthe
nextpageandthendiscuss:
a. Themaindifferenceamongalliance,mergerandacquisition.
b. Thebenefitsanddrawbacksofstrategicalliances
c. Thedecisionmakingprocesstoformanalliance

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 2

Howwouldyoudefineastrategicalliance?
Basically,astrategicallianceisanassociationbetweentwoormorecompaniesthathavedecided
to share resources in a specific, mutually beneficial project. Alliances are often confused with
mergers and acquisitions. Although these business solutions share similarities, they are far from
being the same. While mergers and acquisitions represent permanent, structural changes for the
company, an alliance is simply a businesstobusiness collaboration. For small businesses,
strategicalliancesareawaytoworktogetherwithotherswhilenotlosingtheirindividuality.
Whyarestrategicalliancessopopularthesedays?
Well,marketglobalizationandconstanttechnologicaldevelopmentshavemadeitverydifficultfor
companies to get ahead by themselves. Instead, by teaming up with others, they complement
resources and capabilities, minimize risks and therefore are able to grow more quickly and
efficiently. They are an essential driver for growth. Yet, what impresses me is that rivals are
becomingalliesandcompetitionisturningintocooperation.
Basedonyourexperience,whatistheoutcomeofalliances?
In most cases, the benefits outweigh the drawbacks. For example, by forming an alliance a
companyexpandsitscustomerbaseandgainsaccesstonewmarkets,whicharekeyelementsfor
anycompany.Companiesalsobenefitfromthetransferofskillsandknowhowandthusareable
to accelerate their product development process. In all cases, a welldeveloped alliance will
definitely strengthen the companys image. But, it could also have some drawbacks. Managers
may have to deal with diverse operating practices. Another disadvantage may be the need to
overcome language barriers. Cultural factors may also complicate the smooth running of the
project. In my view, the antidote to these drawbacks is to keep an open communication flow.
Finally,alliancesmightleadtounexpectedbusinessopportunitiesforthecompaniesinvolved.
Howdocompaniesdecidetoformanalliance?
This is a strategic decision, so its not a question of pulling together at any cost. The process
involvesholdingalotofmeetings.Initially,thecompanyhastoidentifythestrategyobjectivesand
the potential partners strengths and weaknesses. Then, it has to assess the opportunity and
leverage it represents for the business. At this stage, they should be able to decide if they join
forces. Only then will they negotiate each partners contributions and rewards as well as protect
anyproprietaryinformation,addressterminationclausesandpenaltiesforpoorperformance,etc.
Oncethecompaniesagreeonthetermsandconditions,theybegintoimplementthealliance.
Inyouropinion,whicharethecriticalsuccessfactors?
If you want to have a reasonable chance of success, you should focus on assuring senior
management commitment, building a trustworthy relationship and trying to match corporate
cultures,asfaraspossible.

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 3

1.COMPREHENSION
Matchthesephrasessothattheyreflectideasfromthetext.
1 Inasuccessfulalliance a offersflexibilitytothebusinessesinvolved
2 Astrategicalliance b partnerstrusteachother
3 Inourchallengingenvironment c involvesstructuralchanges
4 Amerger d companiesneedtopoolresources
5 Companyculture e needstobealignedtotheallianceobjectives

2.VOCABULARY
a) Fillinthegapswiththewordsinthebox.
coalition network merger
cooperative jointventure association
1. Theoppositionpartiesformedatowinvotesintheparliamentary
elections.
2. SonyEricssonisacompanythatgrewoutofatomanufacturemobile
phones.
3. BoeingacquiredMcDonnellDouglas,inarenownedtransaction.
4. WhenPetergraduated,hejoinedtheEngineering.
5. Freelanceprofessionalsusuallyformpartofatoshareresourcesand
information.
6. Localfarmersdecidedtoworktogether,shareprofitsandlosses,sotheysetupa
.

b) Matchthewordstocompleteeachidiom.
1 team a businesswith
2 join b together
3 get c up
4 pull d inwith
5 do e forces

3.LANGUAGE
Makesentencesdescribingpositiveandnegativeoutcomesusingthefollowing
expressions.
outweigh benefitfrom complicate
amajoradvantage/disadvantage resultin

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 4

Video
WatchthevideoabouttheStrategicAlliancebetweenPSAPeugeotCitronandGMand
answerthequestionsbelow.
www.euronews.com/2012/02/29/peugeotgmalliancetargetssavings
1. WhatwilltheFrenchcarmakerdotoconstitutethealliance?
2. Whatresourceswillthetwocompaniesbringtothenewassociation?
3. Howwilltheybenefitfinancially?
4. Whichfactorshaveledbothcompaniestomakethisdecision?

Roleplay:Adecisionmakingmeeting

Scenario
NATIVAisaSouthAmericanbasedsmallsizedcompanythatproducesandmarketsherbal
infusions.T.T.Ltd.isawellknownEuropeansmallsizedcompanythatsellsexoticteasand
beverages. The general managers of both firms meet to look for synergies and to decide
whethertomakeastrategicallianceornot.

Instructions
Readtherolecardwhichyouteachergivesyou.Discusstheadvantagesand
disadvantagesofastrategicmergerwithapartner.Writetheseinthetableonthe
nextpage.RankthebenefitsunderPositive;thedrawbacksunderNegative;and
anypossiblenewbusinessunderPossibilities.Together,prepareabrief
presentationofyourcompany.
Holdthemeeting:trytofindacommonobjectivewiththemanageroftheother
company,discusstheadvantagesanddisadvantagesofanalliance,andmakea
decision.Addanyideastoyourtable.
Tohelpyoudecideifthepotentialallianceisbeneficialforyourbusinessusethe
followingtable.Evaluatetheresultsandmakeyourdecision.

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 5

Positive Negative Possibilities

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 6

Building strategic alliances

Dana Poklepovic

Teachers instructions
Level: C1(Advanced)
Timing: 90120minutes(dependingonthegroupsizeandthetimeusedforthemeeting)
Target: JobexperiencedbusinessEnglishlearnersandbusinessstudents
Aims
toimprovespeakingskillsinthe
contextofstrategicalliances
topractisereading
comprehensionskills
developvocabularyandidiomsin
thecontextofstrategicalliances
topractiselisteningforspecific
information
todescribetheoutcomesofan
action
todevelopdecisionmakingskills
inEnglish
Tasks
discussbusinessleaders
quotationsaboutstrategic
alliances
readaninterview,relay
informationaboutalliancesand
matchsentencehalvesonkey
concepts
Completevocabularyactivities
withtheaidofthewrittentext
watchavideoaboutareal
strategicalliance
holdadecisionmakingmeeting

BuildingstrategicalliancesisawinningentryintheProfessionalEnglishOnlineIATEFL
BESIGLessonPlanCompetition.ItcanbeusedonitsownorwithBusinessAdvantage
Advanced,Unit6,Leadership.Strategicallianceshavebecomeamajorexpansiontoolfor
companiesaswellasakeytopicfordiscussionintheBusinessEnglishclassroom.This
lessonhelpsstudentstoworkwiththevocabularyandlanguageofthisareaandtoapply
itincontext.
TofindoutaboutBusinessAdvantage,visit:
www.cambridge.org/elt/businessadvantage

Preparation:
Copyandcutupenoughcopiesofthequotationsonpage8sothatonehalfoftheclass
hasthefirstquotationandtheotherhalfthesecondone.
CopyandcutupenoughcopiesoftherolecardssothathalftheclasshasRolecard1and
halftheclasshasRolecard2.Ifyouhaveanoddnumberofstudents,copytheConsultant
Rolecardforonestudent.
YoumaywishtohavedictionariesavailableforReadingexercise2.

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 7

Instructions:

Leadin
Distributethecutoutquotations.Allowstudents2minutestoreadandanalysethem.
Movestudentsintogroups,ensuringthateachgrouphasbothquotations.Letthegroups
expresstheiropinions.Elicitthesimilaritiesanddifferencesbetweenthetwoquotations.
Similarities:theneedtoworkingroups,associationsetc.insteadofworkingisolated.Both
arewarnings.Differences:thepointofview,whileoneisfocusedonglobalizationand
todayseconomicenvironment,theotherisfocusedonthefutureandtheneedtoact
rightnow.Checkstudentsknowtheexpressiongoitalone:todosomethingwithout
otherpeople.

Beforereading
Studentsaregoingtoreadaninterviewwithanexpertinstrategicalliances.Putstudents
intopairsandaskthemtodiscussthequestions.Askthemtofeedbacktheirresponsesto
theclass.
1. Alliancesmaybeformedatdifferentlevels:Nationsmayenterintoformalagreementsto
cooperate;statesmaycooperatethroughmilitarytreaties.Politicalpartiesordelegates
worktogetherinthepursuitofacommongoal.Atbusinesslevel,companiesmake
alliances.Andofcoursemarriageisalsoanalliance.
2. Commitment,cleargoalsandtrust.Checkwithstudentsiftheyknowothers.

Reading
Putstudentsintopairsandinstructthemtoreadtheinterview.Checkunderstanding:
Mergers and acquisitions involve structural and permanent changes in the company. An
alliance involves collaboration in a mutually beneficial project; it does not need to be
permanent.
Benefits:extendedcustomerbase,accesstonewmarkets,transferofskillandknowhow,
acceleratedproductdevelopment,strengthenedcompanyimage.Drawbacks:dealingwith
diverseoperatingpractices,languagebarriers,anddiverseculturalfactors.
The process: identify the common objective of the alliance, partners strengths and
weaknesses, assess the opportunity for business, and then negotiate contributions and
rewards, and legal issues. Following agreement of terms and conditions implementation
cantakeplace.
1.Getstudentstocompletetheexercise.Answers:1b;2a;3d;4c;5e
2.Askstudentstofocusonthewordsinbold.Itmaybeusefultohaveadictionaryathand.
Answers:1.coalition;2.jointventure;3.merger;4.association;5.network;6.
cooperative
Getstudentstocompletetheidiomsexercise.Answers:1c;2e;3d;4b;5a
3.Language.Thisexerciseintendstofamiliarizestudentswiththevocabularytodescribe
outcomes,advantagesanddisadvantages,etc.Theywillneeditlateronfortheroleplay.
Supportmaterial:Forfurthermaterialonthistopic,seethewebsiteoftheAssociationof
StrategicAllianceProfessionals:www.strategicalliances.org

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 8

Video
Watchingthevideoisanoptionalpartofthelessonifyouhavetime,oryoumaywishto
recommendthisvideoforstudentstowatchathomeandallowmoretimefortheroleplay.
www.euronews.com/2012/02/29/peugeotgmalliancetargetssavings

BeforeplayingthevideofromEuronews,letstudentsspeculateabouttheadvantagesand
drawbacksofthisalliance.Allowstudentstoreadthequestionsbeforewatchingthevideo.Pre
teachorelicitovercapacity.

Answers:
1. (AsGMwilltakea7%stakeinPSAPeugeotCitroen),theFrenchcarmakerwillissuenew
sharesforthat.
2. TheywillpoolResearchandDevelopment,vehiclesplatformsandtechnology.
3. Yes,theyexpecttosave1.5bnEurosover5years.
4. SlowsalesandovercapacityinEurope
Discusswithstudentstheirknowledgeandexperienceintheareaofstrategicdevelopments,ifthis
taskisdoneinclass,orfollowthisupinthenextclassifstudentswatchathome).

Roleplay:Adecisionmakingmeeting
Instructstudentstoreadthescenario.Checkunderstanding.
Distributerolecards.Ifyouhaveanoddnumberofstudents,usetheConsultantrolecard.
Groupofstudentstogetheraccordingtotheirrole,sothatmanagersofthesamecompany
remain together. Give them some time to discuss the possible advantages and
disadvantages.Instructstudentstowritetheseinthetableprovided.

Divide class into pairs or threes, ensuring each person in each group has a different role.
Instructthemtoholdameeting.

The goals of the meeting are: to briefly present their own company, find a common
objective between the companies, to discuss the advantages and disadvantages that a
strategicalliancewouldmeanforeachpartner,andfinallytodecideiftheymoveforward
ornot.

Monitorandprovidefeedbackforeachgroup.

ProfessionalEnglishOnlineCambridgeUniversityPress2013..PHOTOCOPIABLE.. 9

Quotationsandrolecards:

Quotation1:
Ifyouthinkyoucangoitaloneintodaysglobaleconomy,youarehighlymistaken
JackWelch,CEOandChairmanofGeneralElectric

Quotation2:
Alliancesarenotanimportantpartofthefuture,theyAREthefuture.Anyonewhodoesnot
understandthisisnotgoingtobearoundforlong
JonathanS.Linen,VPAmericanExpress

RoleCard1:NATIVAgeneralmanager
Yourcompany:
Hasaproductioncapacityof10,000tonsayear.
Sellsonly4,000tonsayearinSouthAmericanmarketandholdsa60%marketshare.

In order to enter new market, would have to pay ordinary freight and transportation costs
(witha30%impactoncosts)
YourstaffonlyspeakSpanish.
Yourmanagementteamhasneverworkedwithotherorganizationalcultures.
Additionalinfo:herbsaregrownaccordingtoorganicproductionstandards.

Rolecard2:T.T.Ltd.generalmanager
Yourcompany:

IstheownerofalargesalesanddistributionnetworkinEurope

Supplies80%ofspecialitystores,restaurantsandhotels.

Holdsa5yearglobaltransportationagreementwithalargeshippingandhandlingcompany.
Yourstaffcomefromdifferentpartsoftheworld.
Yourmanagementteamhasworkedwithdifferentorganizationalcultures.
Additionalinfo:yourcompanyattendsaworldorganicfoodeveryyearinsearchofnewbusiness.

Rolecard3:Consultant
Yourtaskisto:
Helpthepotentialpartnerstoidentifyacommongoal.

Identifystrengthsandweaknessesofeachbusiness.

Giveideashowtoleveragethestrengths

Suggestwaystooffsetweaknesses

Giveafinalrecommendation