Strategic Alliances Between Multinational Corporations

Strategic Alliances in Multinational Corporations

Hewlett-Packard, Starbucks and Wal-Mart all have invested decades of time and expertise into how they structure strategic alliances globally, and each has taken a unique and differentiated approach to fulfilling their strategic objectives for Corporate Social Responsibility (CSR) in the context of these relationships. The intent of this analysis is to address how strategic alliances benefit these companies, an analysis of CSR initiatives arising out of their alliances, and the resulting impact on stakeholders. Recommended actions for alliance partners to be even more socially responsible is also provided.

Analysis of Hewlett-Packard's Alliance with Noranda, Inc.

As the global leader in the research & development, production, selling and service inkjet, laser and specialty printers and imaging devices, HP has a product strategy is highly attuned to the use of consumables and low-cost product designs (Nias, 2011). Inherent in their product and selling strategies is the need to continually refine their reverse logistics process, which is the center of their highly profitable aftermarket business model (Richey, Tokman, Wright, Harvey, 2005). Reverse logistics are a series of techniques used for making product suppliers, service and aftermarket support more customer-centric and profitable instead of being constrained by supply chain operations. HP had a major problem with reverse logistics, far too large to solve on their own, which was the impetus for their alliance with Noranda. The economic reasons HP chose to create and invest in an alliance with them was their over 300,000 square feet of warehousing space in the U.S. alone which was ideal for reverse logistics functions for the HP consumables business (Richey, Tokman, Wright, Harvey, 2005). HP saved nearly $60M in reverse logistics and aftermarket services costs the first year of the alliance with Noranda. Having HP as a client significantly strengthened Noranda business development and sales efforts as well.

There were many CSR issues that arose from the alliance, all of them positive for HP, Noranda, and most importantly, HP customers. Another impact of the alliance was the flexibility it gave HP to further pursue its Design for Environment (DfE) initiative. Since undertaking these specific objectives with their strategic alliances globally in the early 2000 timeframe, HP is considered the global leader in structuring their alliances and partnerships globally to attain DfE and CSR objectives. Table 1 provides an analysis of the key benefits to HP from being the global leader on these initiatives.

Table 1: Analysis of Hewlett-Packard DfE Benefits and Impact Analysis

DfE Engineering & Product Development Goal

Anticipated Environment Impact

Reduction in Costs Possible

Reduction in overall footprint of the device including product weight

Reduces lifetime energy consumption; less end-of-life waste

Significant reduction in sourcing and quality management costs; lower logistics costs; potential for higher production yields

Energy STAR compliance

Significant reduction in energy use; less greenhouse gases, reduction in carbon dioxide generation