Step-by-step explanation
b) The strategic alliance with Tong Yang benefit M & M are-
Expansion of the market from India to Korea: Koreans will embrace the M& M products due to the Tong Yang factors. Tong Yang will urge its consumers to shifts to M & M.
Improved Quality: M &M machines lacked aesthetic appeal which are available in Tong Yang. The acquisition of Tong Yang will automatically transfer the specs to M&M. This will in turn provides products of higher quality in the market.
Increased assets: M &M will have more assets due to the alliance and better financial power.
Decrease competition: Tong Yang getting out of the market which will increase the sells of M & M by reducing competition. There will be few players in the market.
c) The possible risks of the alliance are-
Negative publicity: Tong Yang may have participated in unethical practices before the alliance. This will damage the reputation of M&M in the market. Consumers may opt otherwise if they were affected in a way.
Employee competition: Employee from both sides may try to outdo each other so that they can be retained. This will create a hostile working environment thereby limiting growth.
The value of the company may be inflated: M&M may quote a higher value than the actual after the alliance.
They can be overcome/ minimized by:
Negative publicity can be minimized by doing research before the alliance. The companies must ensure that there is on dishonesty of any kind on the agreement.
Employee competition can be reduced by reassuring them that their jobs are secure. This will reduce fear and unnecessary hostility,.