Business Alliance Review

Weeks 1-6

February 2010

Implementing a Strategic-Alliance Strategy

NO

No Yes

Yes

4 Broad Multinational Strategies:All offer solutions to the global-local

responsiveness dilemma

5-4

The Five Competitive Forces That Determine Industry Profitability

Five-Forces Model

5-5

The Value of the Five Forces Model(2 of 4)

Determining the Attractiveness of an Industry Using the Five Forces Model

5-6

Completing a Competitive Analysis Grid

Competitive Analysis useful for possibilities of partner selection for competitive alliance

Alliance Creation Framework

Week 2: Readings and Highlights

• CH 1. The Alliance Framework (‘The Strongest Link” Slowinski)

• Introduction /Chapter 1(“Smart Alliances” Harbison, Pekar)

• What is Alliance Strategy? Introduction (Pages 1-15)• Chapter 1 (Pages 19-29)(“Mastering Alliance Strategy”

Bamford, Casseres, Robinson)• CH 5 Putting Strategy Before Structure (“Mastering

Alliance Strategy” Bamford, Casseres)• CH 1 What’s in it for Me?, (“Developing Strategic

Alliances”, Rigbee)

CH 1. The Alliance Framework (‘The Strongest Link” Slowinski)

• What is an alliance?

• Define success and 3 requirements important for internal alliances success (including path dependence)

• Basic understanding of the alliance framework process and match to our alliance framework. This sets the structure for our approach to alliance creation

Introduction /Chapter 1(“Smart Alliances” Harbison, Pekar)

• Rational for alliances and growth capabilities• Definition Strategic Alliance• Types of general alliances:

• Transactional alliances• Strategic alliances

• Strategic Alliance Objectives• Risk sharing -Handling funding constraints• Economies of scale –Skills leverage• Market segment access - Value added barriers• Technology access• Geographic access

What is Alliance Strategy? Introduction (Pages 1-15)

• Alliance Definition

• Alliance Strategy– Alliance Design– Alliance Management– Alliance Constellation– Alliance Capacity

Chapter 1 (Pages 19-29)(“Mastering Alliance Strategy” Bamford, Casseres, Robinson)

• How alliances capture value:

– Building new businesses,Accessing new markets,Acquiring skills,Gaining scale,Improving supply chain,Creating networks

• Seven deadly alliance sins:– Unclear objectives, lack of deatiled business

plan, decision gridlock, aligning with weal or competitive partner, unmanaged culture clash, failure to learn or protect core capabilities, failure to plan for alliance evolution

CH 5 Putting Strategy Before Structure (“Mastering Alliance Strategy” Bamford, Casseres)

• Top ten key success factors that influence the success of an alliance

• Three main elements to form an alliance:– Strategy– Partner selection– Deal structure

CH 1 What’s in it for Me?, (“Developing Strategic Alliances”, Rigbee)

• WHY: Reasons for developing an alliance:

• General areas that profit from developing alliances:– Technology, Training– Market share, Customer service improvement– Innovation, Cost savings– Financial stability, buying parity improvements– Supply chain improvement, productivity

increase

Week 3: Readings and Highlights

• Ch. 2 Types of Strategic Alliances (“Developing Strategic Alliances”, Rigbee)

• What is an Alliance? (“Building, Leading and Managing Strategic Alliances”, Kuglin and Hook)

Ch. 2 Types of Strategic Alliances (“Developing Strategic Alliances”, Rigbee)

• Type of alliances (strategic and transactional)– Cross promotion– Strategic alliances for cobranding– Strategic alliances to serve national interest– Community based alliances– Alliances with competition– Alliances with competitors to open new markets– Strategic alliances for buying parity– Alliances with competitors to build an industry– Strategic alliances to beat competition– Strategic alliances to block new competitors– Strategic alliances for product development– Strategic alliances for research– plus

What is an Alliance? (“Building, Leading and Managing Strategic Alliances”, Kuglin and Hook)

• Definition of alliance

• Types of Alliances: Function Based– Sales Alliance– Solution specific alliance– Geographic specific alliance– Investment alliance– Joint Venture alliance

• Framework to determine need for alliance– Match with class framework

Week 4: Readings and Highlights• Ch 4 Corporate Self Analysis (“Intelligent

Business Analysis” Segil)• Ch. 3 How to Find and Select Alliance

Partners (“Developing Strategic Alliances”, Rigbee)

• DOCSA Analysis• Ch. 6 Selecting the Partner (‘The

Strongest Link” Slowinski)• Ch. 5 Preparing for the Alliance

(“Intelligent Business Analysis” Segil)

Ch 4 Corporate Self Analysis (“Intelligent Business Analysis” Segil)

• Corporate Self analysis- 6 step self examination task

– The Culture cluster – DOCSA, checklist– The financial picture – esp. for divisions

involved– Business definition and SWOT – update given

current realities– Possible strategic direction- across divisions– Senior executive input- input and support

essential– Selection of alliance strategy- mission

statement and objectives

Ch. 3 How to Find and Select Alliance Partners (“Developing Strategic Alliances”, Rigbee)

• Finding an alliance partner- where to look?

• Selecting an alliance partner- core values– Trust, tolerance, cooperation, commitment,

mutuality.

• 10 critical qualities for alliance partner

• Credentials of your future alliance partner

Cultural Analysis Technique

• Diagnosing Organizational Culture for Strategic Application (DOCSA)– Hofstede identifies dimensions of

organizational culture (www.docsa.com)– When applied to different subsidiaries of an

MNC different corporate cultures can be identified and proactive solutions developed to ensure compatibility between all subsidiaries

Ch. 6 Selecting the Partner (‘The Strongest Link” Slowinski)

• Strategic Fit Reconciliation Map– Visual summary of strategic fit and potential

problems

• Resource Fit Reconciliation Map– Ensure potential partner has sufficient

resources to bring to alliance

• Intangible Factor in Partner Selection

Ch. 5 Preparing for the Alliance (“Intelligent Business Analysis” Segil)

• Step 1: Criteria for Partner- Quantitative and Qualitative based on corporate self analysis and goals created

• Step 2: Develop list of potential partners• Step 3 Strategic fit analysis – fit criteria • Step 4 Rank Candidates: acceptable resource and strategic

reconciliation maps• Step 5 Meeting and evaluating candidates• Step 6 identify and know corporate champion• Step 7 Potential problems: 80/20 rule, internal sabotage• Step 8 Obtain internal approval• Step 9 implementation plan• Step 10 Pre-deal evaluation

Week 5: Readings and Highlights

• Ch. 6 Collaborating With Competitors (“Mastering Alliance Strategy” Bamford, Casseres, Robinson)

• -Ch7 Trust, The Glue That Binds the Extended Enterprise(Te Extended Enterprise”, Davis)

Ch. 6 Collaborating With Competitors (“Mastering Alliance Strategy” Bamford, Casseres,

Robinson)

• Explain why alliance with competitors is a valuable option

• Reasons: Expand product lines, Reduce costs, gaining market share, creating new skills

• Risks: technology leakage, telegraphing strategic intentions, customer defection, slow decision making, business or asset fire sale

-Ch7 Trust, The Glue That Binds the Extended Enterprise(Te Extended Enterprise”, Davis)

• Alliance like thinking (value creation, balance legal logic with common sense) vs. contractual thinking (risk mitigation, emphasis on legal correctness)

Week 6: Readings and Highlights

• Ch.7 Crafting the Agreement? (“Mastering Alliance Strategy” Bamford, Casseres, Robinson)

• MOU

• NDNC

• Legal Documents – Important Boiler plate articles

Ch.7 Crafting the Agreement? (“Mastering Alliance Strategy” Bamford, Casseres, Robinson)

• Identify different perspectives between executives and lawyers (potential disagreements)– Ownership (decision rights) 50/50– Conflict resolution mechanisms– Scope: Where alliance begins and ends– Valuation: valuing contribution– Exit: Preparing for end – identify events that

trigger a right to exist

Legal documents

• NDNC- describe and identify uses

• MOU – describe and identify uses

• Boilerplate articles – IP– Term– Laws– Dispute resolution