Strategic Alliance Between Volkswagen and Tata

Volkswagen and Tata Case Analysis
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Volkswagen and Tata Case Analysis
A strategic alliance is a common strategy used by many companies, especially in the motor industry. A strategic alliance is a specific arrangement that allows two companies to collaborate and gain mutually without interfering with the interdependence of each other (Gundolf et al., 2018). A strategic alliance is simple than other strategies such as joint ventures. A strategic alliance is essential since each company creates significant values, which leads to short-term and long-term goals achievement. Besides, the success of any strategic alliance is also defined by the terms and structures used. The paper analyzes a strategic alliance of Volkswagen and Tata companies by focusing on the success of the deal, joint values, and recommendations.
Individual and Joint Values
Volkswagen's values on board are a larger market share and an effective brand identity. The case study indicates that Volkswagen has heavily invested in India, more than any other company with 5000 employees (Volkswagen and Tata Motors, 2017). It means that the company has a larger market share, and creating an alliance with Tata allows it to bring on board its customers across India. Besides, Volkswagen has a well-established brand identity in India, and therefore, it brings a high-quality value and perception to the alliance, appropriate for genuine competition. Consequently, Volkswagen has significant individual value to the alliance.
On the other hand, Tata Motors creates unique values from Volkswagen and makes the strategic alliance reliable and long-term. Tata creates the value of trust in the alliance. According to the case study, Tata's vehicles are trusted and have more than 9 million sales (Volkswagen and Tata Motors, 2017). Tata plays a key role in the strategic alliance since trust and loyalty in the motor industry is pivotal. Consumers must be comfortable with the goods and car services and security. The joint values created by the two companies in the alliance are long-term solutions to consumer complaints, cost-saving, and effective working relationships with the customers. For instance, Volkswagen had become non-competitive with quality issues. However, creating an alliance with Tata provides a better image due to trusted brands.
The Success of the Alliance Deal
For the deal to be successful, a reliable alliance structure is necessary. The structure must accommodate the interests of the two companies. The structure must be legally and financially driven by a well-established negotiation framework (Kazakova et al., 2018). For instance, Tata and Volkswagen are all financially stable with higher sales; therefore, the negotiation must be equally based to ensure the mutual benefit of each company. The structuring of the alliance should also consider preconceived notions such as quality issues and trust. Volkswagen's main weakness is non-competitive and qu...