Alliances can be groupings of different personalities who have a common goal which in most cases involves profits. Realistic goals and size I believe are the key features here.For an alliance to work well; they should initially start by setting their own objectives, which are attainable during a measurable time span. Few people are fast in decision making compared to a large group hence serves as an added advantage to the group. In cases of raising capital, a large group is preferred as it has more members to contribute. In sharing risks, they are evenly distributed reducing the burden of risk bearing ratio. When the groups achieve their goals, there is that satisfaction that comes in handy, and this motivates them to work harder even more (Allen, 2006). The same case applies to the size and the groups’ size advantages should always outweigh the disadvantages.
Low costs are different from low prices though they can influence each other. When a firm prices its products at low prices it probably operates on loss basis due to production costs. Low prices attract customers making the company competitive and relevant in the market. Low costs on the other hand refer to subsidized costs (Kinney & Raiborn, 2009). This is barely influenced by the cost of production materials in case of a manufacturing industry. High cost of raw materials increases the production making the prices charged high. Low costs also determine the quality of some products as it is associated with poor qualities. A company can have low costs and offer high prices. For example, a manufacturing company can have its own raw materials thus avoiding the procurement costs, produce high quality goods and price them at high profits (Mor-Barak, 2011). Such companies end up making high profits compared, to industries that procure raw materials from identified suppliers.
Allen, P. (2006). Service orientation: winning strategies and best practices. London: Cambridge University Press.
Bell, M. P. (2012). Diversity in organizations. Mason, Ohio: South-Western College.
Kinney, M. R., & Raiborn, C. A. (2009). Cost accounting: Foundations and evolutions. Mason, OH, USA: Thomson/South-Western.
Mor-Barak, M. E. (2011). Managing diversity: Toward a globally inclusive workplace. Los Angeles: SAGE.