No abstract

Strategic alliances, one component of a total quality management program, break down linkages of a supply chain and help alliance partners to address new markets that could not be economically satisfied by a single firm. In recent years, through numerous press releases and anecdotal references, there have been an increased number of reported strategic alliances. However, there have been no systematic studies of the prevalence and impact of strategic alliances in specific industries and no way to obtain information on the costs and benefits of these formal relationships. This current research addresses these gaps. As part of a long-term longitudinal research program covering diverse industries, two different industries, one in products (food and beverages) and the other in services (executive recruiting) were studied to determine the extent of penetration and effectiveness of strategic alliances. This paper presents examples of strategic alliances and the survey results describing penetration, types of alliances, business benefits, and expected costs.

<p class="MsoFootnoteText" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-family: Times New Roman; font-size: x-small;">Strategic Alliances are an important component of an effective Total Quality Management program (TQM) and of business growth.<span style="mso-spacerun: yes;">&nbsp; </span>The Food and Beverage industry was studied as part of a long-term longitudinal research program, covering diverse industries, to determine the extent of penetration and effectiveness of strategic alliances and TQM. The results indicated that 62% of respondents participate in strategic alliances and 82% practice TQM. Over 74% of firms that did participate reported achieving or exceeded alliance goals and, significantly, 73% experienced increased business revenue. Approximately 11.84% of participants reported that costs exceeded expectations while 15.13% enjoyed lower costs. Some methods to enhance strategic alliance effectiveness are discussed.</span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">Total Quality Management (TQM) is a philosophy that includes the idea that to achieve the highest level of quality one must extend the quality system and program as far back in the Supply Chain as possible, i.e., to the supplier(s), the supplier&rsquo;s supplier and beyond if applicable (first, second, third, etc., tier suppliers), and as far forward as possible, i.e., to customers¹.<span style="mso-spacerun: yes;">&nbsp; </span>TQM also embraces the following five concepts namely; continuous improvement<span style="mso-spacerun: yes;">&nbsp; </span>(a never ending search for perfection), bench-marking (learning from the &ldquo;best-of-the best or &ldquo;best-in-class&rdquo;), use of empowered employee teams⁶, just-in-time practices (JIT) (use of strategic alliances and few suppliers²), and knowledge of tools (at least 51 tools including Statistical Quality Control³).</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">JIT practices include the use of strategic alliances; which may be with first, second and third tier suppliers and/or with customers; to achieve competitive advantages as well as to improve quality throughout the business system of an enterprise.²<span style="mso-spacerun: yes;">&nbsp;&nbsp; </span>A Strategic Alliance is a formal agreement to supply a good(s) or services(s) and to jointly expand knowledge, develop applications and commercialize new products, with the rights of co-ownership, and commercial exploitation of the inventions within the boundaries of the Alliance particulars. Alliance partners work together to serve the ultimate consumer by doing together what each partner could not do alone. The Strategic Alliance agreement includes Supply, Technology, Intellectual Property, Legal and Termination/Disengagement sub-agreements and, generally, has a term of at least 3 years but not usually more than 5 years. The objective of a Strategic Alliance is to achieve competitive advantage for each partner through productivity and quality improvements and significant innovation.²</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt; mso-pagination: none;"><span style="font-size: 10pt;"><span style="font-family: Times New Roman;">This research was undertaken to determine the penetration of TQM and strategic alliances in the Food and Beverage industry.<span style="mso-spacerun: yes;">&nbsp; </span>The intent is to re-study this industry in about 4 to 5 years to understand the evolution of TQM and strategic alliances from the baseline reported herein. The authors comprise the Strategic Alliance Research Group that expects to study a broad array of US industries on these subjects.⁵ The reader is referred to the authors&rsquo; Web site at www.tsarg.com for the organization&rsquo;s vision, mission, objectives and recent research.</span></span></p>

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-bidi-font-style: italic; mso-bidi-font-size: 12.0pt;">The penetration and practice of strategic alliances and Total Quality Management in a goods industry (Chemical Industry) was compared to that for a service industry (Financial Services).</span><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"><span style="mso-spacerun: yes;">&nbsp;&nbsp; </span><span style="mso-bidi-font-style: italic;">The ingoing hypothesis that the Financial Services Industry and the Chemical Industry were similar as it relates to strategic alliances and TQM, based on the longevity of these concepts, was not fully supported. Clear industry similarities and differences were noted. For example, the penetration of TQM and strategic alliances was deeper in the Chemical Industry. This is thought to be the result of the earlier application of TQM and strategic alliances in goods industries. Company size, as measured by revenue, did not affect whether small or medium sized companies in either industry practiced TQM, engaged in strategic alliances or the number of strategic alliances that each had.<span style="mso-spacerun: yes;">&nbsp; </span>The proportion of strategic alliance practitioners who also practiced TQM was statistically similar for both industries. Importantly, a high, and similar, proportion of strategic alliance participants in both industries achieved business growth.<span style="mso-spacerun: yes;">&nbsp; </span>While those practitioners did achieve a reduction of the numbers of suppliers there is significant room for improvement in both industries. Strategic alliance performance met or exceeded expectations and alliance costs were on or below forecasts in both industries but the result was significantly better for the Financial Services industry in both instances. The lower outcomes for the Chemical Industry are most likely rooted in negative aspects of relationships with strategic alliance partners as suggested by the top 5 advantages and top 5 disadvantages responses. Significantly, a high proportion of strategic alliances will continue with most of these being with the current partner and a few with new partners.<span style="mso-spacerun: yes;">&nbsp; </span>The Financial Services Industry outperforms the Chemical Industry on this measure.</span></span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"></span></span></p><span style="font-family: Times New Roman;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;"><span style="mso-bidi-font-style: italic;"><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-style: italic; mso-bidi-font-size: 12.0pt;">It is recommended that firms in the Financial Services Industry closely examine the benefits that strategic alliances can yield, and then conduct pilot tests. On the other hand, firms in the Chemical Industry need to improve their relationships with potential partners in order to maximize the outcome of strategic alliances</span><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt;">.</span></p></span></span></span>

<p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">This paper is divided into two parts.<span style="mso-spacerun: yes;">&nbsp; </span>The first part will discuss the techniques needed to implement a web-based survey.<span style="mso-spacerun: yes;">&nbsp; </span>Part two will present the results that the authors have obtained using web-based surveying verses the traditional return by mail/fax surveys.</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">A number of issues need to be addressed before a web-based survey can be implemented. <span style="mso-spacerun: yes;">&nbsp;</span>Those issues are: selection of an Internet Service Provider, selection of server software, selection of Web creation software, building the web site, creating the form, and linking the website to a database. </span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">&nbsp;</span></span></p><p class="MsoNormal" style="text-align: justify; margin: 0in 0.5in 0pt;"><span style="font-size: 10pt; mso-bidi-font-size: 12.0pt; mso-bidi-font-style: italic;"><span style="font-family: Times New Roman;">The authors have conducted five major surveys over the last three years. <span style="mso-spacerun: yes;">&nbsp;</span>The last three surveys have given the respondents the option of filling out the survey and mailing/faxing it back or responding online.<span style="mso-spacerun: yes;">&nbsp; </span>The results reveal a bias against the web.<span style="mso-spacerun: yes;">&nbsp; </span>We will discuss some of the reasons we believe this to be the case.</span></span></p>