A Model for Alliance Partner Selection Based on GM (1, 1) and DEA Frameworks - Case of Vietnamese Coffee Industry

Abstract

Due to the fierce market competition, the alliance between companies aiming to increase operational efficiency and competitiveness has become the inevitable trend. However, not all of the alliance strategies are 100% successful in reality. The most important question for the company leader is: How to find out the best partner when an alliance? In order to deal with this problem, this study proposes a systematic approach to find out the best partner in the alliance process based on the Grey prediction models and Data Envelopment Analysis (DEA). To illustrate above approach, 07 coffee trading companies with full data in Đăk Lăk province, Vietnam are used as Decision-Making Units (DMUs). The empirical results show that 721 Coffee one member company (DMU7) has become the best partner for Thang Loi Coffee Joint Stock Company in the alliance. In the future direction, this proposed approach will be extended and applied in this or many fields by considering lots of different factors or using different methodologies to deal with practical scenarios.