Company/Business Alliances
Company/Business Alliances
Joint Venture
A “joint venture” is a coalition where firms agree to create new entity or investment. Sony-Ericsson Company is an excellent example of joint venture alliance (Olavsrud, 2001). The alliance was formed Ericsson of Sweden and Sony Corporation of Japan. The alliance between Ericsson and Sony Corporation was formed in October, 2001. The arrangement stipulated that the new entity, Sony-Ericsson, would take over all the sales, marketing and design operations of the parent companies.
Franchise Agreement
A franchise is a business alliance where an entity that is already established in the market allows a new company to use its brand and networks in order to establish its operation. An excellent example of a franchise agreement is visible in the McDonald chain of restaurant. The McDonald franchise agreement allows new entities to use McDonald’s trademarks; signs and equipments; menu; management systems; marketing activities and restaurant design (McDonald, 2012). The new entity would, in return, pay a franchise fee and act in accordance with McDonald’s standards.
Consortia
A consortium is an alliance between individual, firms or other organizations, which is established with the purpose of pursuing a common goal. The Consortia of Administrators for Native American Rehabilitation (CANAR) is an excellent example of this form of alliance (CANAR, 2012). The consortium brings about several organizations with the aim of promoting the welfare of Native Americans.
Licensing Agreement
Licensing agreement is an alliance whereby one party (licensor) grants another party (licensee) the right to produce and sell its goods or services. Daiichi Sankyo- Arqule alliance is an excellent example of a licensing agreement (Arqule, 2012). This agreement allows Arqule to use Daiichi Sankyo proprietary technology in its operations.
Subcontracts
Subcontract is an arrangement where one party (the contract) grants the responsibility of fulfilling part or the entire contract duties to another party (the subcontractor) (Majib, 2010). Subcontracting arrangements are common in the construction industry. In this industry large entities (contractors) subcontracts small entities to fulfill various responsibilities.
References
Olavsrud T. (2001). Sony, Ericsson Link Up for Joint Venture. October 18, 2012. http://www.internetnews.com/bus-news/article.php/873941/Sony+Ericsson+Link+Up+For+Joint+Venture.htm
McDonalds (200). The McDonald’s Franchise Agreement. October 18, 2012. http://www.business2000.ie/pdf/pdf_2/mcdonalds_2nd_ed.pdf
CANAR (2012). CANAR Home. October 18, 2012. http://www.canar.org/
Arqule (2012) Alliances and Collaborations. October 18, 2012. http://www.arqule.com/abo/col/
Majib M. (2010). Subcontracting or Co-contracting. October 18, 2012.citeseerx.ist.psu.edu/viewdoc/download?doi…1…–United States
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