Strategic Alliance with Competitors
The strategic alliance between two companies does not have to be from different industry. Forming alliance between competitors can also create an advantage for both partners. The strategic alliance with competitors strengthen both companies against new entrants or outsiders (Hamel, Doz, & Prahalad, 1989). Developing new technology and gaining access to a new market can be hard for one company to work alone. Therefore, competitors often work together to gain new technology and market access (Hamel et al., 1989).
Toyota and General Motors Joint Venture Operations
In the past, the Japanese and American auto companies have worked together to gain an advantage. In 1983, Toyota and General Motors (GM) opened up a car factory called New United Motor Manufacturing (NUMMI) in Fremont, California (Niland, 1989). It was a joint venture between Toyota and GM. As each partner invested 50 percent interest, both companies shared the profits they created in this joint venture strategic alliance (Niland, 1989).
NUMMI Management and Workforce. The NUMMI’s executives where were pulled from both companies to oversee the operations. The management philosophies were facilitated by the Japanese concepts because Toyota is responsible for production. The Japanese management philosophies encourage continues operation improvement, quality control, safety, and efficiency (Niland, 1989). The NUMMI hired former GM employees for the workforce. In addition, NUMMI also