Strategic Alliance in a Healthcare Services Market Entry

Flows between partners in strategic alliance are much more comprehensive. Usually, responsibilities vary in accordance to the terms and conditions of the contract. Standard strategic alliance implies sharing knowledge and experience, pulling resources to contribute to the common goals. If the common objective of partners is creating a healthcare services company in St. Petersburg that works in the same manner as it is practiced in Finnish healthcare industry, then the Finnish Healthcare Service Company will have to provide information flows of the Finnish technology, know-how and any other expert contributions that can be required for pursuing the common goal. From the local private or public medical organization’s side, the major information flow, desirable for the foreign partner, is, obviously, deep local market knowledge and experience. Again, those flows may vary depending on the situation. There are cases when financial flows are also required for exercising of partner’s targets. Usually in such cases strategic alliance is directed to the establishment of Joint Venture.

For the case, the main incentive to enter strategic alliances is facilitation of foreign market entry. Initial and ongoing costs and risks are significantly reduced. Partnership is also a very useful strategy in those markets where the culture, both business and social, is substantively different (Tradestart 2015). Russian and Finnish healthcare market exactly fit into this specification. Business and social culture is truly different, as well as the healthcare system as a whole. There is a strong need for support during initial stages of market entry.

Creating a strategic alliance with a medical organization of St. Petersburg can give the project opportunity to learn from partner. As it was already mentioned in 3.1.4, cross border alliance can provide the project with invaluable local market knowledge, additional sources of capital, networks of customers, suppliers and partners, legal procedures, politics, and many other factors contributing to obtaining of the competitive advantage. All those elements are essential for participating on the Russian healthcare market. Having some sort of backup is required especially in legal procedures implementation and network creating. Russian healthcare marker is so full with highly experienced and large medical organizations, that it may take years and decades for foreign company operating in a different system to start actual operations and come to success.

However, strategic alliance is possible as a first stage of entering the Russian healthcare market. Even though parties exchange experience and knowledge, contribute to the common objectives together, they remain being independent companies. It may appear so that alliance will bring more benefits to the local medical company. Finnish partner will share necessary technological and operational knowledge in return for obtaining target market information, but at the end of the day the company which is located in the desired market will be able to establish the HSC based on obtained knowledge of a Finnish healthcare system on its own. One should not forget that the ethical standards differ a lot in partner’s counties, in addition to the fact that it is originally easier to implement the idea being a local company which borrows and adapts Finnish system and standards of healthcare.

So, the idea of creating a strategic alliance has its potential. There are many significant advantages that it can bring for the project. However, it may turn to the loss of the idea at all. Thus, applying this kind of strategy is preferable only with reliable partners or during the initial stages of market entry.

Date: 2015-12-17; view: 763