Role of Strategic Alliance as an Instrument for Rapid Growth, by the Afghan Firms

Abstract

Currently in Afghanistan businesses are often constrained by the small domestic market, remoteness from major markets and access to capital, all of these elements serve as barriers to growth. Consequently Afghanistan has a high percentage of small to medium enterprises (SMEs’) that remain small and fail to realize their growth potential.The key elements of today’s business strategies are alliances to compete for a market leadership position. This study narrates the role of strategic alliances as an instrument for rapid growth by Afghanistan based service/construction firms. This study examines the experiences of a small number of such firms in relation to their role of strategic alliances. By recognizing concepts that positively or adversely affect the likelihood of success of such alliances it is hope that future firms within Afghanistan can benefit from thesis findings when developing their own growth strategies.The qualitative technique of semi-structured in depth interviews was used to gather primary data in response to the research questions. This research shows that the key contributor to the success for failure of alliances is whether all the parties will benefit equitable from the venture and the relative strategic importance of the alliance to the stakeholder. A new finding of special relevance to Afghanistan business is that being construction and is crucial to attracting the best alliance partners.

Strategic alliances are not a panacea for every firm and at every situation. However through strategic alliances, firms can improve their competitive positioning, gain entry to new markets, increment critical skills, and share/ the risk and cost of major development projects. This research highlights the benefits of taking a long term strategic approach to the formation of alliances. The research approach was to carry out a literature review of the wider topic and postulate a conceptual framework which identifies a number of concepts that are likely to affect success.

Keywords: Strategic Alliance, Joint Ventures, Uncertainty, Partnerships