Global alliances and strategy implementation

International Journal of Global Business, 7 (1), 77-94, June 2014 77

Building Global Strategic Alliances and Coalitions for Foreign Investment Opportunities

Dr. Balarabe A. Jakada

Department of Business Administration and Entrepreneurship

Bayero University, Kano, Nigeria.

bajakada@yahoo.com

Abstract

Global strategic alliance and coalition is a diffuse way of effective combination of strengths of

companies aiming at entering new markets, exploring new technologies, bypassing government

entry restrictions and to learn quickly from the leading firm in the partnership, all in an effort to

exploit foreign investment opportunities. Strategic alliances are however, not easy to develop and

support. They often fail because of technical errors made by management of member firms. To

make it a success, a strong and efficient alliance agreement has to be in place to enable companies

to gain in markets that would otherwise be uneconomical. Building alliances requires considerable

time and energy from all parties involved with a detailed plan, expectations, limitations and scopes,

and the likely benefits drivable from the project. Alliances take a number of forms and go by

various labels. Alliances may be contracts, limited partnerships, general partnerships, or corporate

joint ventures, or may take less formal forms, such as a referral network. The paper is aimed at

exploring and educating prospective and allied businesses or firms the need and significance of

across border coalition, and how to go about it. It is a literature based paper and therefore, reviews

related literatures from journal articles, texts, seminar papers and some online sources for better

understanding of the concept. The paper looked into issues in building global strategic alliances

and coalitions, developing a global strategy, why the formation of alliances, issues in selecting

alliances partners, stages involved, and benefits drivable from such partnership. It further

highlights the conceivable types of strategic alliance and sighted examples of real life alliances. It

was found that global alliances had helped big firms explore new international markets and new

technological competencies. Thus the paper recommends that a firm, who really wants to have a

global touch, would have to start through alliances or coalition.

mailto:bajakada@yahoo.com
International Journal of Global Business, 7 (1), 77-94, June 2014 78

Key words: Strategic alliance, Globalization, Strategy, Coalition, Foreign Direct Investment

Introduction

Change is an ever present facet of business development. Businesses transfer ownership, for

example, and end up reformulating their entire business structures. Companies hire outside

consultants to advise restructuring during financial crises. Sometimes the fact that businesses go

global is the product of the inevitable ebb and flow of commerce. An overseas buyer may transfer

operations to the home country. The majority of an industry's business may shift overseas, making

global expansion all the more desirable. Competition may develop in regions or countries such

that it is unwise for a company not to follow.

Companies go international for a variety of reasons but the typical goal is company growth or

expansion. When a company hires international employees or searches for new markets abroad,

an international strategy can help diversify and expand the business. Economic globalization is the

process during which businesses rapidly expand their markets to include global clients. Such

expansion is possible in part because technological breakthroughs throughout the 20th century

rendered global communication easier. Air travel and email networks mean it is possible to manage

a business from a remote location. Now businesses often have the option of going global, they

assess a range of considerations before beginning such expansion.

During the last half of the twentieth century, many barriers to international trade fell and a wave

of firms began pursuing global strategies to gain a competitive advantage. However, some

industries benefited more from globalization than do others, and some nations have a comparative

advantage over other nations in certain industries when it comes to foreign investments. According

to Hornberger (2011) there are promising trends in global Foreign Direct Investment (FDI) flows

for developing and transition economies”. Each year more and more FDI is flowing not only from

developed into developing economies but also from one developing or transition economy to

another. UNCTAD (2009: 17) notably, since the mid-1980s, most developing countries have

become much more open to FDI, with a view to benefiting from the development contributions

which FDI (particularly high-quality FDI) can generate for host countries. In the same vein,

Todeva & Knoke (2005) highlighted the possibility of both firms and host countries reducing the

business risk of international operation, is by cooperation among firms in the form of alliances and

coalition. In other words, corporations that have aligned their business with others are seen to be

more efficient and effective on the international business scene (Todeva & Knoke, 2005).

With growth and development in sight, developing countries seek to make regulatory work for

FDI more transparent, stable, predictable, secure and thereby more attractive for foreign investors

(LJNCTAD 2003). Again this style of partnership trading should be replaced with strategic

alliances and mergers if developing countries have a chance of developing through the assistance

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of the developed nations in the 21st century (Kinyeki and Mwangi, 2013). This is a critical issue

of economic development for the developing nations.

As this paper integrates three different issues that are pertinent in International Business, each of

them will be closely examined to have a better linkage on their interdependence. Objectively, this

paper seeks to explore every available opportunity in building a global strategic alliance or

coalition in exploring international business opportunities, how multinationals align, why they

align, stages involved and importantly strategize while doing business globally.

The Concept of Globalization and Foreign investment

Globalization is an ongoing process by which regional economies, societies and cultures have

become integrated. The term is used to describe the fact that the world becomes a global village

and that trade, production and finance are being conducted on a globe of scale. Economic

globalization is the process during which businesses rapidly expand their markets to include global

clients. Such expansion is possible in part because technological breakthroughs throughout the

20th century rendered global communication easier. Air travel and email networks mean it is

possible to manage a business from a remote location. Now businesses often have the option of

going global, they assess a range of considerations before beginning such expansion.

Foreign direct investment (FDI) is but an investment made by a company (parent company) into a

foreign company. Making an argument for why foreign direct investment plays an extra ordinary

and growing role in global business. Graham and Spaulding (2005) says “foreign direct investment

in its classic definition, is defined as a company from one country making a physical investment

into building a factory in another country”. They further maintained that “the sea change in trade

and investment policies and regulatory environment globally in the past decade, including the

policy and tariff liberalization, easing of restrictions on foreign investment and acquisition in many

nations, and the deregulation and privatization of many industries, has probably been the most

significant catalyst for FDI’S expanded role in recent time”.

Building a Global Strategy

Today, we live in a global economy in which time taken for people to move between continents

has been significantly reduced. The business response of large business organisations has to

recognise that they now operate in a global market place and to develop appropriate strategies.

Problems associated with global business management have been identified as factors that

negatively impact the performance and productivity of multinational corporations and in turn,

adversely affect regional and national economic growth. And the new global reality that

organizations and their leaders face is a rapidly changing international context. The intercultural

dynamics of increasing globalization demand strategic cultural thinking and a global mindset that

sees beyond national borders and is open to exchanging new ideas. Leaders of all organizations

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find themselves increasingly working in a fluid environment requiring flexible thinking to adapt

quickly to new and different intercultural environments (Dean, 2006).

Organizations are facing increased global competition, economic uncertainties, and changing

markets. Technology is changing the way we conduct business and manage information.

Outsourcing of significant functions within businesses and organizations complicates the

landscape of supplier relations. Suppliers and vendor partners may be located in the same city,

region or country. But they are just as likely to be located halfway around the world, adding new

challenges to business management.

Global strategy is considered to be an act of building a unique and sustainable ways by which

organization create value, a broad formula for how business is going to compete against another

business in the global market. Global strategy leads to a wide variety of business strategies, and a

high level of adaptation to the local business environment. The challenge here is to develop one

single strategy that can be applied throughout the world at the same time maintaining the flexibility

to adapt that strategy to the local business environment when necessary (Yip, 2002). A global

strategy involves a carefully crafted single strategy for the entire network of subsidiaries and

partners, encompassing many countries simultaneously and leveraging synergies across many

countries. The global strategy assumes that the centre should standardize its operations and

products in all the different countries, unless there is a compelling reason for not doing so (Zou

and Cavusgil, 2002). It is therefore important for the centre to offer a significant coordination its

subsidiaries activities ranging from product standardization, responsiveness to local business

environment and competition in the market.

Global Strategic Alliance and Coalition

Strategic alliances developed and propagated as formalized inter-organizational relationships,

particularly among companies in international business systems. These cooperative arrangements

seek to achieve organizational objectives better through collaboration than through competition,

but alliances also generate problems at several levels of analysis (Margarita, 2009). A strategic

alliance is a term used to describe a variety of cooperative agreements between different firms,

such as shared research, formal joint ventures, or minority equity participation (Campbell & Reuer

2001). Strategic alliance can be described as a process wherein participants willingly modify their

basic business practices with a purpose to reduce duplication and waste while facilitating improved

performance (Frankle, Whipple and Frayer, 1996). In simple words, a strategic alliance is

sometimes just referred to as “partnership” that offers businesses a chance to join forces for a

mutually beneficial opportunity and sustained competitive advantage (Yi Wei, 2007).

According to Dean (2006) in an increasingly globalized environment, organizations in different

nations can expand their reach and effectiveness by building global partnerships, transnational

partnerships and international strategic alliances with other organizations. The term global alliance

encompasses all of these. Dean (2006) explained that such arrangements are especially useful

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where organizations are operating in highly fluid environments of increasing informational

complexity and cultural diversity”. Relationships built on mutual respect and trust hold significant

potential benefits, including increased confidence and security, reduced transactional costs and

better information exchange and creative synergies generated by cultural diversity. In the same

vein, the modern form of strategic alliance is becoming increasingly popular and has three

distinguishing characteristics as described by Jagersma (2005); they are usually between firms in

high - industrialized nations; the focus is often on creating new products and technologies rather

than distributing existing ones; they are often only created for short term durations. Technology

exchange is a major objective for many strategic alliances. The reason for this is that technological

innovations are based on interdisciplinary advances and it is difficult for a single firm to possess

the necessary resources or capabilities to conduct its own effective R&D efforts. This is also

supported by shorter product life cycles and the need for many companies to stay competitive

through innovation (Jagersma, 2005). Similarly Kotelnikov (2010) defined it as strategic alliance

where two or more businesses join together for a set period of time. The businesses, usually, are

not in direct competition, but have similar products or services that are directed toward the same

target audience. He also mentioned that, strategic alliances enable business to gain competitive

advantage through access to a partner’s resources, including markets, technologies, capital and

people.

Literally, coalition or alliance can simply mean conjunction or fusion between two or more

different phenomenon to form a unit, in most case for strategic reasons. Hence, partners may

provide the strategic alliance with resources such as product, distribution channels, manufacturing

capability, project funding, capital equipment, knowledge, expertise or intellectual property. In

other words alliance is a cooperation or collaboration which aims for a synergy where each partner

hopes that the benefit from alliance will be greater than those from individual efforts.

While many analysts regard strategic alliances as recent phenomena, inter-organizational linkages

have existed since the origins of the firm as a production unit. Some examples include firm and

entrepreneur ties to credit institutions such as banks; to trade associations such as the early Dutch

Guilds; and to suppliers of raw materials, such as family farms, individual producers, and

craftsmen (Todeva & Knoke, 2005). Meanwhile, the concept of coalitions has undergone differing

applications and meanings within organizational theory. The earliest uses focus on conflicts within

organizations and the presence of multiple goals within the same organization (Simon and March,

1958). They further emphasize that coalitions is between firms but not within organizations.

Another significant period of coalition research centered on James Thompson (1996), where he

coined the term “Dominant coalition”. Thompson (1996) concluded there were certain constraints

on coalition building, mainly the organization’s technology and environment. Thompson theorized

that the more uncertainty in organizations due to technology and environment, the more power

bases that exist. The coalition grows as the uncertainty increases. Thompson (1996) also used the

term, “inner circle” to describe the selected few within an organization whose connections provide

them with influence. Their role in coalition building is often one of leadership, but they seldom act

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alone in achieving goals. Thompson went further to say that. “Their power is enhanced as the

coalition strives to achieve a group goal: thus, the individual and coalition feed off each other”.

Carrying Thompson’s point one step further, interdependency in an organization creates a greater

likelihood for the formation of a coalition or coalitions.

Generally, building alliance or coalition would go a long way in assisting firms (particularly those

in strong alliance) gain more business advantage in their respective dealings over other (especially,

individual organization without ally). Potential coalition members must be persuaded that forming

a coalition would be to their benefit. To do this one needs to demonstrate that your goals are similar

and compatible, that working together will enhance both group’s abilities to reach their goals, and

that the benefits of coalescing will be greater than the costs (Spranger, 2003). The third point can

be demonstrated in either of two ways: incentives can be offered to make the benefits of joining

the coalition high or sanctions can be threatened, making the costs of not joining even higher. For

example, the United States offered a variety of financial aid and political benefits to countries that

joined its coalition against Iraq in 2003; it also threatened negative repercussions for those who

failed to join, and much worse for those who sided with Saddam Hussein. Another method that

can make joining the coalition appealing is to eliminate alternatives to the coalition. Once most of

one’s allies or associates have joined a coalition, it is awkward, perhaps dangerous not to join

oneself. Although people and organizations often prefer non-action to making a risky decision. if

they find themselves choosing between getting on board a growing coalition or being left behind,

getting on board is often more attractive.

Why form Global Alliance or Coalition

Many fast-growth technology companies use strategic alliances to benefit from more-established

channels of distribution, marketing, or brand reputation of bigger, better-known players. However,

more traditional businesses tend to enter alliances for reasons such as geographic expansion, cost

reduction, manufacturing, and other supply-chain synergies (Kinyeki and Mwangi, 2013). To

further support earlier view, Jacob and Weiss (2008) also maintained that companies forms across

border alliances in order to get instant endorsement that would add to the firm’s credibility thereby

gaining more customers at a lower marketing costs. To combine partner resources to develop new

businesses or reduce investment is a vital reason why businesses form alliances. Typical examples

include new business start-ups with parents contributing specific complementary capabilities that

constitute the basis for a new business. For instance, Airbus was a joint venture between French,

German, British and Spanish manufacturers that eventually became a single company. Each

national partner has specialized in one bit of aircraft manufacturing. The French became experts

in aircraft electronics and cockpit design, the British became world leaders in wing manufacturing,

the Germans concentrated on making fuselages and the Spanish focused on aircraft tails (Burdon,

Chelliah & Bhalla, 2009). Strategic alliance designed to respond to competition and to reduce

uncertainty can also create competitive advantages. However, these advantages tend to be more

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temporary those developed through complementary (both vertical and horizontal) strategic

alliances (Belal & Akhter, 2011).

A high degree of integration of specific parent resources is required to achieve goals and it is

desirable to create loyalty to a new business distinct from the parents because their interests might

otherwise prevent the success of collaboration (Kale and Singh, 2009). Toshiba and Motorola, for

example, created a semiconductor manufacturing alliance, even though the two parents competed

in downstream product areas. Direct parent-to-parent collaboration (often including licensing or

long-term contractual agreements) is appropriate when assets or resources are best kept in separate

parent organizations. Parent interests are competitive close parent control is required, and success

cannot be measured in terms of performance measures that apply to stand-alone businesses (for

instance, the main purpose is to learn). Learning may entail improving skills through working with

a partner or gaining access to countries. Turner Broadcasting, which is part of Time Warner, had

a deal with Philips, a Dutch electronics company, where Philips got the right to name a new sports

arena that TBS built in Atlanta. But TBS’s main motive was to find out more about European

consumers and about the digital communications hardware that is Philips’s stock-in-trade (Burdon,

Chelliah & Bhalla, 2009). In the same vein Margarita (2009) emphasizes that expertise and

knowledge can range from learning to deal with government regulations, production knowledge,

or learning how to acquire resources.

To eliminate business risks is another reason why alliances are formed. During the past few years,

Renault, General Motors and DaimlerChrysler have bought stakes in Nissan, Fuji Heavy Industries

(which makes Subaru brand cars), and Mitsubishi Motors, respectively (OECD, 2002). The idea

is that a stake in a Japanese carmaker, with a network of factories and dealerships in Asia, is a less

risky way to expand into the world’s fastest-growing automotive market than a full merger.

Also changing the name of the competitive game is of course one reason why firms form global

alliance. To manage industry rivalry, Star Alliance, which includes Lufthansa and United Airlines,

had a series of loose arrangements to share codes and direct passengers to partners’ flights; then it

began to look more like a quasi-merger, with shared executive lounges and pooled maintenance

facilities (Slywotzky and Hoban, 2007).

Types of Strategic Alliances

The strategic alliances can be mostly summarized into three dimensions: joint venture, equity

strategic alliance, and non-equity strategic alliance. This section reviews the literature on how the

three dimensions of strategic alliance may contribute to partner competitiveness and success in the

global business arena.

Joint Venture

A joint venture is an agreement by two or more parties to form a single entity to undertake a certain

project. When two or more firms form a legally independent firm to share their collaborative

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capabilities and resources to achieve competitive advantages in the market is termed as joint

venture in the form of strategic alliance. Joint ventures are effecting in establishing long-term

relationship and in transferring tacit knowledge. Because it cannot be codified, tacit knowledge is

learned through experiences (Berman et al, 2002) such as those taking place when people from

partner firms work together in joint venture. Expertise and experience in particular field foster the

sustainable competitive advantage. Tacit knowledge is an important source of competitive

advantage for many firms (Tiessen and Linton, 2000).In a joint venture project generally

participating firms share resources and participate in the operations management equally. “Sprint

and Virgin group’s joint venture, called Virgin Mobile USA, targets 15-to-30 years-old as

customers for pay-as-you-go wireless phone service. In another example, Sony Pictures

Entertainment, Warner Bros., Universal Pictures, Paramount Pictures, and Metro-Goldwyn-Mayer

Inc. each have a 20 percent share in joint venture to use the internet to deliver feature films on

demand to customers. According to Belal & Akhter, (2011) Joint ventures are optimal form of

alliances and different from any firm that independently does in the competitive market with own

resources by creating competitive advantages through sharing and combining resources and

capabilities of firms, and overall evidences support this statement. The coordination of

manufacturing and marketing allows ready access to new markets, intelligent data, and reciprocal

flows of technical information (Hoskinson and Busenitz, 2002).

Equity Strategic Alliance

Ownership percentage in equity strategic alliance is often not equal. Two or more firms own the

shares of newly formed company differently according to their contribution in resources and

capability sharing with ultimate goal of developing competitive advantages (Belal & Akhter,

2011). Internationalization of strategic alliances focuses on the linkages between two or more

different firms’ management capabilities and operations activities. The different corporate cultures

are matched into one goal in the strategic alliances when it crosses the boundaries of the country.

Many foreign direct investments such as those made by Japanese and U.S. companies in China are

completed through equity strategic alliances (Harzing, 2002).

Non-equity Strategic Alliance

A non-equity strategic alliance is less formal than a joint venture. To ensure competitive

advantages of two or more companies forming an alliance on a contract basis rather a separate

company and therefore don’t take equity shares (Belal & Akhter, 2011). They share their unique

capabilities and resources to create competitive advantages. Because of this, there is an informal

relationship built among the partners. Consequently, requires less formal relationship and partner

commitments than other forms of strategic alliances. So, the implementation process of non-equity

alliance is simple than other forms of alliances (Das et al, 1998). Since it is less formal relationship

in non-equity alliances, it does not need much of experience like others. In a complex venture

where success necessitates transfer of implied knowledge and expertise, non-equity strategic

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alliances are unsuitable because of their relative informality and lower commitment (Bierly and

Kessler, 2002).

However, firms today increasingly use this type of alliance in many different forms such as

licensing agreement, distribution agreements and supply contracts (Folta and Miller, 2002). The

external factors like uncertainty regarding technology and complex economic environment

motivate commitment in relationships. Competition from the rivals encourages the greater

commitments with partners. Strategic alliances in the form of cooperative strategies are increasing

practicing by the firms because of complexity in operations and high completive pressure. To be

successful in business and survive in the long run some sort of partnership is required in this age

of globalization. To manage the uncertainty and external complexity formation of strategic alliance

is an effective strategy (Inkpen, 2001). Partnership commitments assist to take the decision for

outsourcing. Outsourcing means acquiring value-creating primary or support activity from other

firms. And outsourcing decision helps to form non-equity alliances. To achieve competitive

advantages and less formality this form of alliances are becoming popular (Delio, 1999). Magna

International Inc., a leading global supplier of technologically advanced automotive systems,

components, and modules, has formed many non-equity strategic alliances with automotive

manufacturers who have outsourced by the awards honoring the quality of its work that Magna

has received from many of its customers, including General Motors, Ford Motor Company, Honda,

DaimlerChrysler, and Toyota (Magna, 2002).

Stages of Strategic Alliance Formation

Alliances evolve during their lifetime. The process and evolution of alliances underscore the

importance of the developmental stages. Although researchers agree that alliances evolve in stages,

there is no consensus on the specific stages that alliances go through. But before any other thing,

the intended firm has to develop its global strategy and this development would involve studying

the alliance’s feasibility, objectives and rationale, focusing on the major issues and challenges and

development of resource strategies for production, technology, and people. It requires aligning

alliance objectives with the overall corporate strategy Margarita, (2009). Following Das and Teng

(1999), this paper considers four stages to include: partner selection, structuring/negotiation,

implementation and performance evaluation. Specifically, each alliance is a repetitive sequence of

the four stages, and some stages may repeatedly occur as the alliance evolves (Ring and Van de

Ven, 1994; Doz, 1998; Arino and de la Torre, 1998). For example, after an alliance is formed, the

criteria for partner selection will be reconsidered when a new partner enters into the current

alliance. The initial alliance conditions (e.g., joint scope or division of labour) may have to be

renegotiated in the event of unforeseen changes in the environment and in the relationship status.

In some alliances, performance evaluation will recur regularly over time.

Partner selection

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Forming an alliance includes a series of choices and decisions. Selecting a good partner is a critical

first step. Partnering in international strategic alliance involves a thorough analysis of one’s own

organization in terms of current and potential future resources and capabilities required for its

success. This internal analysis – combined with a clearly defined set of strategic motives – can

help determine what additional resources and capabilities (both task-related and partner-related)

are necessary to ensure a high probability of a successful alliance or coalition (Nielsen, 2008).

Other scholars advocate factors concerning cultural (both corporate and national), strategic,

organizational, and financial traits of the partners (Yan and Luo, 2001).

Partner Selection emphasizes the desirability of a match between the partners' resource profiles,

goals, incentives and strategies (Das and Teng, 2003). Some studies propose that firms should

consider potential partners' reputation, experience, trustworthiness, capabilities and potential

contributions to the alliance as critical selection criteria (Jiang, Li, & Gao 2008; Brouthers,

Brouthers, Wilkinson, 1995; Gulati, 1995; Dyer, 1996). According to Nielsen, (2008) international

alliance experience is accumulated from prior engagements in international strategic alliances and

therefore when selecting a partner for an international strategic alliance, prior experience with

international collaboration on the part of the focal firm may influence the relative importance of

the selection criteria. Other studies highlight the importance of resource complementarities and

learning in the partner selection process (e.g., Lane and Lubatkin, 1998; Mowery, Oxley,

Silverman, 1998).

Generally, firms have either similar or diverse resource endowments. Researchers suggest that

firms should choose a partner with similar but complementary resources and capabilities (Murray

and Kotabe, 2005). On one hand, if firms are to effectively take advantage of the resources

involved in an alliance to achieve desired objectives (say, learning a new technology), the

resources must be complementary. If all partners have the same types of resources, there will be

little knowledge to share and also few benefits to receive. On the other hand, if firms are to

effectively understand, assimilate and absorb knowledge and skills involved in an alliance, they

must have already shared some basic knowledge relevant to the resources and capabilities. If such

overlap is lacking, firms may have incomplete information in identifying which ones can make

real contributions to the alliance and how to value and acquire knowledge from the partners.

The degree of resource complementarily will be a critical factor in determining an alliance's future

course and outcome. Kim and Inkpen (2005) argue that a tension exists between the need for

diverse resources and a need for similar resources. More specifically, excessive resource similarity

indicates that the partners have little to learn from each other, a situation that restricts the

development pace of the alliance. But excessive resource diversity makes it difficult for partners

to learn from each other. It requires utilizing coordination mechanisms across activities, and as a

result the alliance will become difficult to manage (Jiang, Li, & Gao 2008). Therefore, a careful

balance between resource similarity and diversity is at least in theory optimal for a positive alliance

outcome.

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Partner reputation matters allot, firms should also make clear whether this partner has a reputation

for dealing fairly and performing well (Das and Teng, 2001). In the same vein, Jiang, Li, & Gao

(2008) posit that a reputation for trustworthiness and competence is an important strategic asset

and tends to be cumulative overtime. A good reputation signals the quality of a firm and

encourages other firms to ally with it. Another important consideration in partner selection is prior

experience, despite conflicting views, Jiang, Li, & Gao (2008) posit that prior ties are positive

predictors of future strategic alliance relationship success by providing a wide range of advantages

and benefits for the partners (see Kim and Inkpen, 2005; Richards and Yang, 2007).

Structuring/Negotiation

In this stage, partner firms should decide on appropriate governance forms, moderated scope of

collaborative activities, effective division of labour, and so forth. Firms can choose from two

primary alliance governance forms: equity and non-equity alliances. Osborn and Baughn (1990)

point out that the governance mode within an alliance may indicate the motives of the partners and

have a large impact on alliance evolution. For the same reason, Hennart (2006) argues that

choosing an ex ante contractor an equity JV is an important decision for alliance managers, and

the chosen type can impact subsequent behaviours of the partners and predict the future alliance