Running head: STRATEGIC ALLIANCES 1
Journal Article Review 1
Busi-613 B02
Professor Brooke Quigg
January 26, 2014
STRATEGIC ALLIANCES 2
Journal Article Review 1
Cante, C. J., Calluzzo, V. J., Schwartz, D. P., & Schwartz, T. M. (2004).Strategic alliances in
food and beverage and executive recruiting industries. Supply Chain Management: An
International Journal. 9(3), 230-240. Doi: 10.1108/13598540410544926.
Purpose
The single most important issue here is the study of significance of the strategic alliances
as a subset of total quality management formed within the foodservice industry and the executive
recruiting industry. The authors examined available literature and found a need to qualify the
importance of alliances within business industries to broaden the customer base, and add value to
individual firms.
Theory of the Relationship between Strategic Alliances and TQM
The researchers, who call themselves The Strategic Alliance Research Group (TSARG),
state that strategic alliances are an aspect of TQM. By definition, TQM, or total quality
management is a way of thinking company-wide that focuses on customer satisfaction[You12].
TSARG describes TQM as a process that 1) continually seeks perfection, 2) uses bench-marking
to continually learn, 3) empowers employees, 4) uses knowledge tools, including statistical data,
and finally, 4) uses JIT, or the just-in-time processes which uses strategic alliances in order to
enhance quality[Can04].
TSARG recognize the different types of alliances that can be formed within industries.
They state that strategic alliances are relationships between firms that create more value than
they can on their own[Can04]. Within an alliance, firms form agreements based on different
factors, usually for a three to five year period. These factors can include the supply processes,
technology, intellectual property, legal requirements, and the termination or separation
agreement[Can04]. This study is the first of several planned studies by TSARG to examine
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strategic alliances within the foodservice industry, and the executive recruiting industry, a service
industry. The group has plans to evaluate the chemical, financial services and health care
industries later.[Can04].
Setting of the Study
The research group TSARG determined to study the particular benefits of strategic
alliances with a products-based industry and a service-based industry. In order to do this, they
used a three-step process to gather information about these industries. As previously mentioned,
the products-based industry was food service, and service-based industry was executive
recruiting. The first step to the study was to record the public announcements regarding the
alliances and the expected benefits[Can04]. These were found in newspapers, or other articles.
Some of the benefits announced included the warehousing and distribution of goods, sourcing
materials globally, and the “selling and efficiency benefits of the supply chain”[Can04].
The second step was to develop a survey and distribute it randomly to professionals in
each of the industries. Within the food service industry, a survey of 19 questions was mailed to
500 randomly selected business found in the Institute of Food Technologies Directory. This
number represented just one-quarter of the 2000 members listed[Can04]. The group of
researchers did not note the number of responses to this survey. A similar survey was mailed to
39 per cent of the 605 members listed in the Directory of Executive Recruiters. There were 107
returned surveys, representing 18 per cent of this industry[Can04].
The third step was to follow up with several of the respondents deemed as “key players”
of their industries via telephone conversations, industry conferences or consulting jobs to
implement strategic alliances[Can04].
Results of the Study
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The researchers found that both industries, although very different, were using alliances
to strengthen their companies in areas where they had weaknesses. Additionally, they found that
many of the alliances expanded the customer base for each business. For instance, in the food
service industry, Albrecht Grocery Company partnered with Fleming Companies a warehousing
business, to store products closer to its customer base[Can04]. With this dual effort, the grocery
business was able to supply products to meet the demand of its customers due to the close
proximity of the warehouse.
In the executive recruiting industry, the researchers note the primary alliances formed
were “e-partnerships”[Can04]. The result of these types of alliances broadened the services for
customers, or recruits as well as expanded the pool of jobs to a larger geographical area[Can04].
An example noted in the study was the partnership between Kelly Scientific Resources, an
international company specializing in scientific positions, with Search Masters International, a
firm that has global connections and their own software. This partnered effort benefits the
customer or client by making available more opportunities for employment on an international
scale[Can04].
Discussion of Managerial Implications
The managerial implication of this study is the use of strategic alliances exhibit benefit to
the firms involved, and help build the customer base. . As previously mentioned, firms form
alliances to benefit from another company’s strength. Because the use of strategic alliances is a
subset of TQM, firms also evaluate and make changes to run more efficiently. Cante, Calluzzo,
Schwartz, and Schwartz note that firms are not competent in every area[Can04]. Looking outside
the company to other firms to warehouse product, evaluate clients, human resources, or
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marketing provides benefits that can save resources and let the company focus on what it does
best.
References
Cante, C. J. (2004). Strategic alliances in food and beverage and executive recruiting industries.
Supply Chain Management: An International Journal, 9(3), 230-240.
doi:10.1108/13598540410544926
Dodge, D. D. (1998, January/March). Business & Economic Review, pp. 18-20.
Young, G. (2012). Supply Chain Managment (Third ed.). United States: McGraw-Hill.
