strategic alliances
DESCRIPTION
Strategic alliances are developed to increase speed to market and require a high degree of communication.TRANSCRIPT
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Strategic Alliances
Overview
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What you will learn…
• Strategic Alliance defined• Information requirements • Examples of Strategic Alliances• Factors promoting Strategic Alliances• Types of Strategic alliances• Risks and cost of Strategic Alliances• Balancing co-operation and competition• Alliances and Ethics• Summary
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Strategic Alliance defined
• Strategic alliances are co-operative relationships between two or more independent organisations, designed to achieve mutually beneficial goals for as long as is economically viable.
• They carry uncertainties that are not manageable in a contractual arrangement.
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Figure 1: Information Phases for the alliance process
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IBM’s Global Alliances
• Early Alliances: Responding to Japan• IBM’s Initiatives During the 1990s: Rebuilding
Competitiveness
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The Global Airline Industry
• Airline industry consolidation of 1990s• From code sharing, joint marketing
activities to combining operations.• Examples of Alliances
– Star Alliance– ONE world Alliance
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Airlines Type of Alliance
y United Airlinesy Lufthansay Scandinavian y Thai Internationaly Varig BrazilianyAir CanadayAir New Zealandy Mexicana
Star Alliance: Code sharing, joint marketing; includes up to 15 partners in 2002
Global Airline Alliances
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• New market entry
• Shaping of industry evolution
• Learning and applying new technologies
• Rounding out a product line
Factors promoting alliances
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• Licensing ArrangementsThe least sophisticated and easiest-to-manage
type of alliance
• Joint VenturesThe creation of a third entity representing the
interests and capital of the partners
• Consortia and NetworksHighly complex linkages among groups of
companies
Types of Strategic Alliances
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Licensing Arrangements
Primary reasons for entry• A need for help in commercializing a new
technology• Global expansion of a brand franchise or
marketing image
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Joint Ventures
Primary reasons for entry• Vertical integration
• Learning a partner’s skills
• Upgrading and improving skills
• Shaping industry evolution
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Consortia and Networks
• Multi partner Consortia
Multi partner alliances designed to share an underlying technology
• Cross-Holding Consortia
Formal groups of companies that own large cross-holdings and equity stakes in each other
• Industry-Spanning Alliance Networks
Firms sharing knowledge, costs, and risks
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Risks and Costs of Alliances
• Rising incompatibility
• Risk of knowledge or skill leakage
• Risk of dependence
• Strategic control costs
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Balancing Cooperation and Competition
• Understand the firm’s knowledge and skill base
• Choose complementary partners
• Keep alliance personnel long-term
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Alliances and Ethics
• Balancing collaboration and competition within the alliance
• The issue of loyalty among personnel assigned to the alliance
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Summary
• Strategic alliances are no longer a strategic option but a necessity in many markets and industries.
• Dynamic markets for products and technologies coupled with increasing costs has increased the use of alliances.
• It is hard to capture value in strategic alliances.
• Knowledge resource exchange is important.
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You are welcome to contact Nigel Bairstow at B2B Whiteboard your source of B2B Asia / Pacific marketing advice
http://www.linkedin.com/pub/nigel-bairstow/6/41b/726
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