ASG Case Study

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What were the main objectives with the alliance? (Emma)
ASG and Danzas are two international transport companies. ASG has its biggest market in Scandinavia and Danzas in central Europe. The formation of an alliance between the two companies in 1992 sought to achieve a number of benefits. The main objectives identified through the case study are presented below.

Respond to customer needs
One important driver to form the alliance was to improve the responsiveness of customer needs. The logistics services requested by the customers had driven internationalization in the transport industry. Operating companies was forced to respond to this external pressure in order to stay profitable. The need for international extension and coordination was
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One of the affected companies was ASG, which experienced a number of problems in doing business in continental Europe. Firstly, its agent in Netherlands went bankrupt. Later, because of the increasing internationalization and indirect interdependency between firms company Lassen in Germany and ASG became competitors in European market. Lastly, ASG lost the relationship with agent in Italy. Therefore the main issue and identified weakness that ASG aimed to solve was to secure their network of representatives in Europe. The strategic solution was to form an alliance with the Swiss company Danzas. The company had strengths, such as representatives in 33 countries, knowledge, strong position and its biggest market in central Europe. Moreover, ASG and Danzas had previous experience of working together and successfully developing The France-Sweden cooperation. For these strengths, Danzas was evaluated as an appropriate partner to collaborate with and potentially solve weaknesses of ASG.
Formation of the alliance was perceived beneficial for Danzas as well. ASG is a Swedish company, with strong position and customer base in its home market. Moreover, based on the successful France-Sweden cooperation, it has proven to be a trusted business partner. Danzas sought to utilize these strengths
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The success of an alliance is among other things, entirely dependent upon thorough strategy development and a partner assessment for shared aims and objectives (Išoraitė, 2009) to the point where they would appear to be employed by the same company. In their Harvard Business Review article, Simple Rules for Making Alliances Work, Johnathan Hughes and Jeff Weiss made the following assertment, “ members must know how their counterparts operate: how they make decisions, how they allocate resources, how they share information. That in turn, requires a clear understanding of each partner’s organizational structure, policies and procedures, and culture and norms” (Hughes & Weiss, 2007. para. 7). This however was clearly not the case for the ASG-Danzas alliance. At the time of the alliance, there were extensive information gaps present. For example, Danzas was not even aware that ERT was a whole owned subsidiary of ASG. Furthermore, clear miscommunication and perhaps even deceiving behavior can be traced in the alliance agreement when Danzas forced ASG to buy into a ten-year contract with a Finnish transport company when it was later revealed that no such contract even

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