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Stupid Case

Essay by   •  December 8, 2012  •  Essay  •  224 Words (1 Pages)  •  542 Views

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Companies enter into strategic alliances primarily to strengthen their competitive advantage, enter new markets, hedge against uncertainty, access critical complementary assets, and learn new capabilities, (Rothaermel, 245). When Barnes & Noble entered into the strategic alliance, their primary goal was to enter new markets. Starbucks already had a successful coffee drinking following, and Barnes & Noble knew that they wanted to provide a better ambiance for their customers. It was more feasible for them to expand their services through a strategic alliance rather than creating a brand new coffee shop on their own. It would also be more likely to succeed because people already loved Starbuck's coffee.

Starbucks primarily entered into the alliance because they wanted to strengthen their competitive position. In the end, both companies ended up benefiting from the relationship because people were starting to go into Barnes & Noble earlier in order to get their coffee (this used to be the most slow time for the book store) and people were buying more coffee when they wanted to take breaks from their shopping, (Gulati). This strategic alliance did have its ups and downs, especially when Starbucks started to expand where Barnes & Noble had created their own cafes using licensed Starbucks coffee. However, they were both able to work through the obstacles and reap the benefits of their enduring strategic alliance,



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