Strategic Alliance Implemetation Between Nation Media Group and Media24 of South Africa

Abstract

Strategic alliances have gained popularity in the recent decades and has become increasingly favorable choice for companies that intend to achieve competitive advantage over rival firms so as to make a stand in the global market. Firms are faced with rapid changing global trends and dramatic economic development, it is always impossible for firms to grow individually. This study examines how the Strategic alliance between Nation Media Group and Media24 was formed and the implementation challenges. The study was carried out as a case study to allow for in-depth examination and analysis of various data collected. The primary data was collected through interviewing top management of Nation Media Group including the Group Chief Executive Officer (GCEO) who were involved in the formation of the strategic alliance by virtue of their position in the company. Secondary data was obtained in the form of relevant documented materials on strategic alliances, strategy papers, and minutes of meetings by the alliance partners and agreements signed by both Nation Media Group and Media24 of South Africa. The data obtained in qualitative form was analyzed through content analysis. This approach helps in getting areas of consensus and disagreements from various interviews done and the already documented data. The major findings of study indicates that the alliance faced a number of challenges in the formation and implementation. Given the urgency in the formation of the alliance, Nation Media Group were mainly reacting to the perceived threat from the local competitor entering into alliance with another firm from the same country, that is, South Africa. The company (NMG) did not develop a strategic vision and fit, conducted its own research to determine the real value of the alliance and due diligence in the partner selection which are critical success factors in any alliance. Lack of cultural fit and mistrust among the partners were also were also challenges that were encountered in the alliance implementation. There are a number of important factors that were ignored and which made implementation very difficult. The study will help the companies that would like to enter into alliances to first ask themselves important questions such as, does the proposed alliance contribute its objectives more effectively and efficiently, are there competitive advantages in forming the alliance, does the alliance fit within the strategic plan of the company what are the channels and mechanisms to be used in identifying a potential strategic partner and what barriers that are to be overcome in order to establish a strategic alliance. One of the limitation of the study is that researcher was unable to interview the Media24 management who were involved in the formation and implementation of the alliance as they had all left for South Africa as the alliance came to an abrupt end.