Motivation, achievements and failure of strategic alliances: the case of Swedish auto-manufacturers in Russia

A large number of industrial manufacturers are forming various types of alliances in a bid to improve their competitive position. The number of strategic alliances has almost doubled in the past ten years and is expected to increase even more in the future. However, while many organisations often rush to jump on the bandwagon of strategic alliances, few succeed. The failure rate of strategic alliances is projected to be as high as 70 percent. Interestingly, marriage relationships are found to have similar failure rate. In spite of the high failure rate of strategic alliances, very little is known about the potential failure factors and their possible correlation with alliance motivation and objectives.
This paper examines the importance that industrial manufacturers place on various motives for alliance formation and the potential reasons for alliance failure. The paper presents the results of a case- and survey-based study of two large Swedish auto-manufacturers in Russia. The study demonstrates that strategic and managerial motivations are more important than financial and technological motivations, and that a strategic alliance (joint venture) strategy is better rewarded but riskier than a go-it alone strategy in Russia. Surprisingly, the results do not show strong support that a go-it-alone strategy is less desirable than a joint venture alliance.