Amazon and Future Group: Rethinking the Alliance Strategy

  • Reference: IVEY-9B16M108-E

  • Year: 2016

  • Number of pages: 13

  • Geographic Setting: India

  • Publication Date: Jun 27, 2016

  • Fecha de edición: Oct 26, 2016

  • Source: Ivey Business School (Canada)

  • Type of Document: Case

  • Industry Setting: Retail Trade;

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Description

In 2014, the chief executives officers of Amazon and Future Group led their companies into an alliance that, while initially successful, encountered some difficulties in regards to discounts on their retail products. With the global retail industry standing at US$25.4 trillion in 2016, and the percentage of which e-commerce made up 7.4 per cent, the partners would have to decide if they should resolve their conflict and remain allies, or if they should consider becoming independent companies again. If one partner placed a higher value on the use of discounts than the other, how much was the alliance really worth?

Learning Objective

The case can be used in undergraduate and postgraduate strategic management courses to understand an organization’s internationalization strategy and how alliances can be used to complement an organization’s business strategy. The case can also be used in an elective course on strategic alliances and joint ventures to understand the concept of strategic alliances. Using this case, students will ·understand how the institutional environment impacts a firm’s international strategy, especially when the strategy relates to strategic alliances and joint ventures; ·understand the factors to be considered when selecting a partner for strategic alliance; ·understand the risks involved in an international strategic alliance; ·understand the negotiation terms and conditions; anddevelop a framework for assessing the advantages and disadvantages of continuing with the strategic alliance.

Keywords

alliance negotiation brick-and-mortar stores e-tail foreign investment policy international strategy partner selection strategic alliance