Decision making strategies for alliances joint ventures; and a case of study of Flora Food Group

While the competition between business in global markets are expected for growth and product development, the point where a firm collaborates with competitors and businesses in distinct industries is a more frequent occurrence in greater scale than expected; precisely because of the direct upgrade effect in quality of combined operations as indicated by Rao & Ruekert (1994), and especially needed in new emerging markets, where institutional and socioeconomic challenges stand in the way of market entry and the development of value for the firms and business entering, by consequence  adding value to global chains, as these new participants become relevant to one another on a global scale; with such decision making behind it being the key point on our research, through a qualitative based study on brands of the secondary sector in Colombia (foods, drinks, FMCG), and taking Flora Food Group as a case of study for observation by analyzing its history of movements & strategies, checking if their branch operating in the nation can actually add to the aforementioned upgrading on its own value chain. By such, the findings have indicated that the strategies needed for upgrading in the industry are alliances focused on the development of new food technologies, as well as higher quality products, and implementation of foodservice channels for direct distribution to clients within the HORECA (Hotel, Restaurant, Cafeteria) industry; as well as establishing temporal Co-shared IP´s, for contractual loyalty programs; while maintaining a firm  governance over quality standards, and a flexible relationship over tech developers. A possible risk that may root from following recent market trends like development and introduction of “green-label” packaging and product lines, is the risk of Greenwashing, leading to biased decision making, and generating an incompatibility with the supply chains already established or an overestimation of the resources available, as a result of rushed campaigns within the organization under new policies. To avoid such, the decision making within the industry normally is composed of agile innovation comites, akin to modernized stage-gate systems, evaluating the technical viability of new product launches, the cost scalability and the regulatory impact on the organization. Some contributions made by analyzing the organizational structure and operations of Flora Food Group that could work for other multinational participants in new markets (in a benchmarking case) would be to invest in off shore quality test facilities; use of manufacturing contracts for tech transfer and absorption; and contractual protection to avoid power asymmetries.