Bologna City Water Research Center

1. Water

1. Case Brief

For several years, Bologna City is experiencing scarcity regarding its water resource, because of the continuous increase of activities that causes water pollution. This prompted the government to develop possible solutions, one of which is the formulation of the Water Research Center (WRC) that will provide facilities for collaborative research initially on a local level with potential global implication. The following areas were identified as starting points for the purification project: filtering, decontamination and regulation.

The Metropolitan Area of Bologna City is divided into two water districts: the Northern Sector and the Southern Sector. Through legislative support, the Head of the state of the Republic requires this two districts to consolidate their efforts and resources to avert the impact of the water problem. Both districts are still in process on what cooperative strategy or strategic alliance they are going to develop. They are given 6 months to submit their position and recommendations and another 6 months for the approval and implementation.

1. Point of View

Mr. Eulo Lopena of Northern Sector

1. Time Context

Present

1. Statement of the Problem

Best cooperative strategy to be adapted by the two water districts that will enable them to develop effective solutions for restoration and protection of waterin the Bologna city.

1. Statement of the Objective

To determine the best strategy the two water district should adapt

1. Areas of Consideration

Strengths

• Research and Development Skills (Water Research Center)

Weaknesses

• Benefits of environmental programs are difficult to calculate and are often omitted entirely on reports.
• Inadequate Human Resources
• Rising Environmental Costs
• Poor Materials Management Systems

Opportunities

• Technological advances in water purification.
• Apply Research and Development skills in new areas

Threats

• Adverse effects of water pollution in the environment.
• Potential for Takeover

1. Alternative Courses of Action

1. Joint venture with Government Participation

1. Equity Strategic Alliance

1. Non-Equity Alliance

X.         Analysis of Alternative Courses of Action

Joint venture with Government Participation

Advantages:

• Gaining access to expertise without need to hire more staff.
• It is easier to exit the venture when the purpose of joining has been executed.
• Control, revenues and risks are shared according to their capital contribution.
• More opportunities for companies to engage in domestic and international joint ventures

Disadvantages:

• Uneven division of work and resources.
• It may be difficult to foster effective working relationships if your partner has a different way of doing business.
• It is difficult to capitalize as an entity in respect to debt because they are finite in their duration and therefore lack permanence.
• legally limited in what they can do and where they can operate

Equity Strategic Alliance

Advantages:

• sharing of technologies, capabilities and resources
• dominating the whole market without any other competitors
• reducing  each districts financial risk based on the agreed percentage contribution

Disadvantages:

• The entity with the greater share suffers greater risk.
• Loss of control of the entity with a lesser share over important matters.
• Irreconcilable differences in business culture and management styles

Non Equity Alliance

Advantages:

• sharing of technologies and resources
• dominating the whole market without any other competitors
• combining expertise and knowledge which will help to best serve the people

Disadvantages:

• No proper organizational structure.
• Extent of sharing is not defined.
• Possible conflict in decision making.

XI.         Conclusion

1. Joint venture

1. Equity Strategic Alliance

1. Non-Equity Alliance

Based on the foregoing analysis, ACA No. 1 Joint Venture with Government Participation is chosen.

XII.         Action Plan