Strategic Alliances and Partnerships

Refreshment PLC case study question:

Discuss the concept of strategic drift and from the viewpoint of Refreshment PLC, identify the likely main strategic drivers that are likely to apply in the case of the proposed strategic alliance.

Whenever strategy is discussed, there has to be a starting point and a desired end point in a given timescale. Strategy is the process or way of getting to the desired state or end point. Strategic drift occurs when external and internal events, foreseeable and unforeseeable impact and alter the course of the strategy, thus effectively misaligning the strategy with the desired outcomes and achieving an altered course of action. This veering off from the set path or strategy is called strategic drift.

Basically, Refreshment PLC aims to infiltrate new Asian markets for its flagship product line which markets its product as low calorie and sugar free. Refreshment sees the Asian market as huge marketing potential and as per strategy, following strategic drivers have been identified:

Strategic Drivers:

The alliance which is being formed will help both Refreshment PLC and Scorpion in attaining mutual strategic objectives which are relevant to each partner respectively.

Evolutionary Drivers:

As refreshment PLC found out the market for its products in Europe is saturated, so it needs to go for greener pastures, in essence market its products in larger markets. It is a very feasible option as information flow mechanisms and the internet have made it possible for alliances to be formed between geographically separated countries, in our case, China and the EU.

Management Failure Drivers:

These drivers are not part of the current alliance scenario but they could build up in the future as mishandling of brands and their respective marketing could occur in Asia or Europe causing strategic drift to occur. So Refreshment PLC has to very carefully align its alliance strategy so that this threat is neutralized.

Speculative Drivers:

Refreshment PLC seems to want to increase sales through tapping new markets, thus speculating that it can achieve higher revenues and thus higher profits if it can sell its products in Asia.