Peugeot stands to gain a lot from the alliance with GM. This is especially because it is currently having many internal and external business complications. Some workers were recently protesting and striking. Furthermore, its in-house bank was under threat of attack by the employees. Additionally, the firm made a tremendous loss in 2012, its largest ever. The alliance will help the firm to arise from these many market complications. It will also serve as a rebranding of sort such that it can acquire a bigger percentage of Europe’s market share. Although it would gain if the alliance came even sooner, it still stands to turn its losses into profits or to break even in the European market.
GM has also been making losses in Europe and it is not expecting any significant changes to occur in the near future. Therefore, this alliance will be beneficial to them especially since the costs will be reduced. The project also targets to introduce new models of cars by the year 2016. This may be a huge break for GM and it may stand to gain a lot of profit from this venture. However, Peugeot stands to gain more from this alliance since it appears to be a sinking ship and GM may be its only ray of hope.
The factor responsible for this alliance is the fact that both companies have been making losses in Europe. For Peugeot, the alliance is especially crucial since it has been making losses in recent months and its cash flows are just being wasted. GM is in this deal mainly because it foresees its reentry and dominance in the European market through the new project that the two companies are running. The alliance will hold in the long term since sufficient planning has been done. The two firms have also invested in new designs that will enable them to attract consumer loyalty. With continued planning, the alliance may hold and the project maybe very successful (Ireland and Hoskisson, 2012).
Innovative Companies- Safaricom
This is telecommunications company in Kenya with the largest number of subscribers in that country. The company is well known for mobile money transfer. Recently it introduced a new call-in medical service for patients to obtain medical consultancy at a small fee. This new service was very innovative since many people live below a dollar a day and hence cannot afford medical care. The innovation was obtained by acquisition of the idea from university students undertaking technical courses. However, the firm has its own internal team of researchers who look into such innovative ventures. Over the next ten years, cooperation of innovative processes from institutions of higher learning and its own research team will be most beneficial to the innovative process of the company. With this approach it will be very easy to sustain innovation in the company.
Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2012). Understanding Business Strategy:
Concepts Plus (3E [i.e. 3rd ed.). Mason, OH.: South-Western Cengage Learning.