Activity 3A
An insightful evaluation of business to business, affiliation, and joint effort
maintained by organisation
Executive Summary
Partnerships between organizations, regardless of whether they are from various pieces of the world or various closures of the inventory network, are an unavoidable truth in business today. A few collisions are close to transitory experiences, enduring just if it takes one accomplice to build up a foothold in another market. Others are the introduction to full consolidation of at least two organizations’ advancements and capacities. Whatever the length and targets of business coalitions, being a decent accomplice has turned into a critical corporate resource. Thus, mentioned partnerships, alliances and joint ventures helps the industry to expand horizontally as well as vertically by involving different stakeholders and how it impacts them.
Findings and Analysis
Ghabbour auto is a large automobile company that provides a flexible working environment and leans on high-margin ancillary businesses. Partnership requires increased sensitivity of each partner’s need especially identifying their goals and priorities in the context of procuring public services. Ghabbour brothers had interest on plethora business lines such as automotive related products, home appliances, electronics, and construction material such as ceramics and cements. Different partnerships and joint ventures have been considered by GB auto as an integral part of rapidly revolutionising their market presence in the respective sector. The topmost function in this context highlights the consideration of a joint venture from the organisational perspective that took place during 2008 (GB Polo Egypt, 2021). The global giant MarcoPolo was considered by GB auto for entering a joint venture for creating a state-of-the-art bus assembly plant in squares. As a result of this partnership, 8000 units per year capacity bus body assembly facility was established by targeting both the export and local markets (GB Polo Egypt, 2021). Moreover, extended quality standards, cost optimisation strategy, highly skilled and trained workforce, and others from the perspective of GB auto had benefited this joint venture by driving its outcome towards greater success.
Apart from that, GB auto also established another partnership with a British-born automotive brand namely MG Motor during 2020 (Amazon AWS, 2020). This is recognised as the most recent partnership created by GB auto considering their agreement covering completely imported models produced by MG International. This recent partnership is expected to benefit the organisation with the distributorship for MG International in the Iraq market. From both the organisational perspective, this alliance is reflected as a forward-looking strategy where combined resources and capabilities of the organisations can efficiently serve the Iraqi market by delivering extended quality and competitive products.
The consequences of social capital theory can be undertaken in this concern in order to highlight the implications of strategic alliances and partnerships undertaken by GB auto. The theoretical understanding reflects that social relationships are valuable resources that might be supportive of the development and accumulation of human capital (Norbutas and Corten, 2018). Similarly, the strategic alliances created by GB auto have been highlighting deliberate opportunities for future development of the organisational competitive advantage with the accumulation of financial capital.
Along with this, the organisational partner’s portfolio has included several renowned global brands. These brands include Bajaj, Hyundai, cherry, Mazda, Volvo, Mitsubishi, Yokohama, diamondback, Jumbo, double coin, Avon, Karry and others (Ghabbour Auto, 2021). Considering the extended collaboration with the mentioned brands, GB auto can be e assumed to undertake a leading position across the global automotive industry in near future.
Activity 3B
Proposed suggestion for the activity and assessment of the effect of your proposal on stakeholders
Researchers have studied stakeholders’ groups within the merging companies such as employees’ and managers. (Birkinshaw, Bresman and Hakanson 2000; Napier 1989; Raukko 2009.)
| Recommendations | GB auto should pay attention to consider an extended market analytical approach as an integral part of empowering their business strategies. It can also benefit the company with adequate interest from the stakeholders perspective that might result in extended financial support and investments as required for progressing over the ever-changing automobile sector. | |
| Justification | The consideration of extended market analytics can make GB auto familiar with the advanced technological implications that are required for innovating the organisational existing operations. Moreover, extended improvement of the organisational product and service quality can also be insured with this strategy that might add a greater value to their brand recognition. | |
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Implications (Risk and impact at least 3 stakeholders) |
Stakeholders | Threat/Opportunity |
| Employee
By incorporating employees in a variety of tasks based on technological progress in a recent advancement operation. This leads to the formation of a strong individual specialist team, which aids in the reduction of manpower in one business sector. Each stakeholder has free will and decides whether to provide resources to the organisation or not (Barnard, 1938). Shareholders There are chances to grow the individual firms by using a streamlined process that generates the shareholder value rather than destroying it. It helps economic policy and boosts the export market. High margin company helps to maximise shareholder return value by boosting production capacity and eliminating rivalry between enterprises (GB Auto Sustainability report 2019) Local Communities These are the most beneficial and satisfied stakeholders from the past two decades as they had a motorized modern auto-rickshaw i.e., Tuk-tuk brought the economy to optimum level. Delivering exceptional service to the customer by lowering economies of sales. |
The employees might obtain an adequate chance of empowering their internal skills level by transforming knowledge with their partner organisational employees. The threat in this case highlights the possibility of unemployment due to having an immense workforce for the company management to manage the workload.
Shareholders might experience the threats of comparatively downfalling value of share as an outcome of joint venture. Joint ventures can eventually create the chances of shared liabilities with regards to the merger with other respective organisations.
The local community might achieve opportunities of increasing job requirements which might address unemployment in the community or society. The community might face the risk of increasing carbon emission in case of not focusing on sustainability.
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Conclusion
In relation to the future implications of business and strategic alliance failure that might take place, GB auto should be attentive to consider product development as an integral part of avoiding the challenging factors. This strategy can encourage them to consider emerging products in order to ensure business growth in the existing market of Egypt. It can also be added with a greater value by referring to the concept of market development in order to profoundly support the organisational growth by expanding into emerging markets with existing products.
Bibliography
Amazon AWS, 2020. GB Auto announces its new partnership. [Online]. Available at: <https://s3.amazonaws.com/resources.inktankir.com/gb/GB-Auto-announces-its-new-partnership-with-SAIC-Motor-Middle-East-FZE-En.pdf> [Accessed 26 October 2021]
Birkinshaw J, Breman.H., Hakanson, L (2000), ‘Managing the post- acquisition integration process: How the human integration and task integration processes: interact to foster value creation,’ Journal of management studies (37) 3: 395- 425.
Desivilya, Helena Sayna.; Palgi, Michal. Paradox in partnership: The role of conflict in partnership building., 1st edition, SAIF zone: Bentham science publishers; 2011.
GB Polo Egypt, 2021. GB POLO. [Online]. Available at: <https://www.gbpoloegypt.com/joint-venture> [Accessed 26 October 2021]
Ghabbour auto industry: Ghabbour auto annual business report 2019.
Ghabbour Auto, 2021. A path of continual evolution. [Online]. Available at: <http://www.ghabbourauto.com/GB_Company_Profile.pdf> [Accessed 26 October 2021]
Norbutas, L. and Corten, R., 2018. Network structure and economic prosperity in municipalities: A large-scale test of social capital theory using social media data. Social networks, 52, pp.120-134.
