The Solazyme’s Cross-Border alliances with Unilever, Sephora, Qantas, and Roquette
Solazyme is a company headquartered in California that sought to expand its operations into the international market through alliances. As the fastest growing manufacturing company in 2011 as listed by Inc. Magazine, Solazyme managed to create value by spread risks and resources through the alliances. The experience of the company in the international market began with its partnership with Unilever, a British-Dutch consumer goods producing company. The alliance had an initial focus on Research and Development (R&D) (Thomson, Peteraf, Strickland, & Gamble, 2016). Unilever utilized the technology platform of Solazyme to efficiently produce oils and other biomaterials that Solazyme initially produced at a large scale.
Another beneficial alliance to Solazyme was the one it collaborated with Sephora, a French Cosmetics company. The alliance helped Solazyme to produce its first luxury skin care brand, Algenist with Sephora agreeing to distribute other brands of Solazyme. It can be said that international alliances and partnerships were significantly essential to the growth of Solazyme (Thomson et al., 2016). For instance, their partnerships with Qantas Airlines in 2011 enabled the firm launch, test, and supply its jet fuel product, SolaJet, a product that augmented Solazyme’s revenue. Additional benefits included designing, distribution, as well as marketing the product to other well-known clients. On its part, Qantas hoped to enhance its reputation as a sustainability leader in the competitive airline industry.
Internationalization of business is not always beneficial to an organization as was seen in the Solazyme case. Not all alliances emerged beneficial to the company. For instance, the company’s partnership with the French company Roquette with an objective of developing, producing, and marketing food products worldwide. Nevertheless, the 50-50 alliance did not work out since the entities found out that they were better on their own rather than together as partners. As such, it wasted resources and time that could have been spent on other meaningful activities. In all these alliances, it is not easy to identify any noteworthy error made by Solazyme since most of the alliances were fruitful and contributed toward the firm’s growth and expansion. It is evident that the management effectively identified the drivers of internationalization and sued appropriate strategies to form the alliances.
How Course Material Plays Out
The course material plays a critical role in many organizations since they exhibit practical or real life applications of concepts learned in the classroom. Some of the classroom concepts that have been effectively applied by various companies relate to overcoming international competition (Wheelen & Hunger, 2011). One of the companies that have constantly expanded its operations in the international markets is Kentucky Fried Chicken (KFC). The company has been in existence since 1930 and has managed to establish over 20,950 outlets globally through franchising. Through the company, the concept of establishing alliances through franchise worldwide is practiced. According to Thomson et al. (2016), global expansion allows an organization to venture into other fresh markets after saturation of the domestic market. Besides, an organization can create value and spread risks. Consequently, the volatility of one market will not affect the other markets the company operates thereby ensuring that it reports profits as planned. Nevertheless, companies such as KFC must overcome many exchange currency risks while reporting their financial performances. The risks are high in periods of high exchange rate volatility and it could significantly affect reported revenues and profits. Other challenges arise in form of cross-country cultural differences and market conditions.
Thomson, A., Peteraf, M., Strickland, A., & Gamble, J. (2016). Crafting and Executing strategy: The quest for competitive advantage. Concepts and Cases. (20th ed.). New York, NY: McGraw-Hill
Wheelen, T., & Hunger, D. (2011). Concepts in strategic management and business policy. London: Pearson Education.