Discuss the lessons evident from Solazyme’s cross border alliances with resepect to co-operative
strategies under the following headings:
- motivations for strategic alliances
- types of strategic alliances
-
The Case
Solazyme cross-border alliances with Sephora, Qantas, Roquette and Unilever. Solazyme, a California-based company that produces oils for nutritional, cosmetic, and biofuel products from algae, was named “America’s Fastest-Growing Manufacturing Company” by Inc. Magazine in 2011. The company has fuelled its rapid growth through a variety of cross-border strategic alliances with much larger partners. These partnerships not only have facilitated Solazyme’s entry into new markets but have also created value through resource sharing and risk spreading. Its partnership with Unilever, a giant British-Dutch consumer-goods company, initially focused on collaborative R&D. Projects were aimed at meeting the growing demand for completely renewable, natural, and sustainable personal care products through the use of algal oils. By further developing Solazyme’s technology platform, the partnership has taken off; with the ability to produce Solazyme’s oils and other biomaterials efficiently and at large scale, Unilever is now taking the next step of marketing and selling those products as part of its ambitious goal to use only sustainable agricultural raw materials by 2020. Solazyme has entered into a variety of marketing and distribution agreements with French cosmetics company Sephora (now part of LVMH). In March 2011, Solazyme launched its luxury skin care brand, Algenist, with Sephora’s help. Sephora has also agreed to distribute Solazyme’s antiaging skin care line, making it avail-able in Sephora stores and at Sephora.com. In 2011, Solazyme also signed a contract with Australian airline Qantas to supply, test, and refine Solazyme’s jet fuel product, SolaJet. Solazyme stands to gain valuable input on how to design and distribute its product while receiving media attention and the marketing advantage of a well-known customer. Likewise, Qantas hopes to better understand how it will achieve its sustainability goals while building its reputation as a sustainability leader in the airline industry. However, not every partnership ends successfully, regardless of the strength of the initial motivations and relationship. Because its algae require sugar to produce oil, Solazyme developed an interest in securing a stable supply of this feedstock. For this purpose, Solazyme created a 50-50 joint venture with French starch processor Roquette to develop, produce, and market food products globally. By working with Roquette, Solazyme hoped to lower its exposure to sugar price fluctuations, trading the use of its innovative techno-logical resources in return for Roquette’s manufacturing infrastructure and expertise. But in 2013, the joint venture dissolved—both parties felt that after the exchange of ideas, technologies, and goals, they would be better off going it alone on the algal food product frontier.
Please answer in less than 700 words
