Alliance of Walgreens and Alliance Boots

Alliance of Walgreens and Alliance Boots

Introduction

Strategic alliance is a kind of agreement between firms that do business together. It goes beyond just dealings between two companies or outsourcing. As soon as the company enters the phase where companies merge or one company acquires other company, the concept of alliance ends (Almuti, 2011). This strategic alliance between two or more companies is done to achieve some particular objective that has mutual benefits for all the companies involved. There are different types of alliances, and thus, the formality of any alliance depends upon agreements and contracts between those parties. It can be just the sharing of resources or risks. The general objective of any alliance is to get the advantage of other company's core competency and innovation. This saves the cost of the company for further research and become cost effective (Small Business, 2013).

Alliances have a long history in conducting a business. The number of alliances has increased multiple folds in the past couple of years. They have become an important element of business organisation because of globalization and increased pressure because of technological advancement (Dunning 1995). The world's largest companies tend to opt for this strategy to perform their business efficiently. The company might not be good at any one operation, or it might be costly for them to install a whole operating plant for that activity. Thus, the company makes alliances with another company that can perform tasks for them and achieve economies of scale. The companies achieve more profits and become successful and efficient through alliances. The company attains the capability to grow without having to invest much or take any risk. Nike is one of the examples of successful alliance because all of its manufacturing services are performed by other companies that Nike has an alliance with (Quinn, 1995)

Discussion

The concept of alliances has been increasing with the passage of time. Companies are looking forward for better options to get growth and sustainability. Pharmaceutical industry has been one of the most attractive sectors and has been contributing to the economy of the country. There have been sharp technological changes and significant restructuring in the pharmaceutical sector. Pharmaceutical sector has been the driving force of globalization because of mergers and alliances in the worldwide companies. Companies establish global sales programs to launch their products which spark the light of globalization. R&D is also an important part of pharmaceutical companies because they continuously need to launch solutions to the increasing health issues of the society. There have been large advancements in biotechnology that have contributed in the increasing cost of R&D for the companies (Rasmussen, 2002).

These technological changes have increased the growth of alliances of pharmaceutical companies for a number of reasons. Alliances take place in the pharmaceutical industry to increase the significance of core technologies. Companies become dependant on each other in making a joint supply for the particular drug. The product life cycle for drugs has shortened because of the new technology ...