What is an Alliance

Strategy?

What is an Alliance Strategy? Why do companies engage into an Alliance? Why do Alliance sometimes fail? Four Elements of Alliance Strategy:

Alliance DesignAlliance ManagementAlliance ConstellationAlliance Capability

Conclusion References

Strategic AllianceThis is a formal relationship or a deal (new venture) between two or more parties to pursue a set of agreed goals to meet critical business needs while remaining independent organizations.

Alliance StrategyAn alliance strategy represents much more than a deal. It is an intent, a dynamic process, and a logic that guides alliance decisions.

“A Strategic Alliance without

an Alliance Strategy is

condemned to fail”

To enter restricted overseas market To gain competitive advantage To search for capabilities such as technology To share risk To gain economies of scale To gain more market share

Facts: Today, Alliances account for 20- 50% of corporate value; whether it is measured in terms of revenue, assets, income or market capitalization.

Over the years, numerous studies have shown that 30- 70% of Alliances fail

Do not meet the goals of the parent companies

Clashing corporate cultures and goals Unclear strategies Weak or unbalanced alliance economics Lack of sufficient operating staff skills and

parent commitment

Four Elements of Alliance Four Elements of Alliance StrategyStrategy

Alliance Design• Why use an alliance?• What is the scope of the alliance?• Criteria and methods of selecting partners• Options for structuring the alliance

Alliance Management• Process of making decisions• Operational decisions• Performance and relationship between the parent company and other company

Four Elements of Alliance Four Elements of Alliance StrategyStrategy

Example, Venture between Xerox and Fuji Photo Film was created to help Xerox sell copiers in Japan.

Alliance Constellation• Should the alliance be formed?• How many and what type?• Interaction among alliances

Four Elements of Alliance Four Elements of Alliance StrategyStrategy

Example, The Star Alliance Case

Alliance Capability

• Who in the corporation should be responsible for specific tasks?• The success of external alliances often depends on having a supportive internal infrastructure

Four Elements of Alliance Four Elements of Alliance StrategyStrategy

The Success of an Alliance Strategy depends much on the unfolding relationship between the partners.

Companies will not survive if they try to do everything themselves.

Alliance Strategy wins the race!!!!!

http://www.alliancestrategy.com/PDFs/BGC%20AllianceStrategy%20CriticalEYE04.pdf

www.google.com Alliance Strategy: Fundamentals for Success, Ben Gomes-Casseres

(2003) : The Arc of Alliance Strategy

Mai Tilogavichai 4780449 Thivaphorn Narang 4780490 Chinajade Yipyintum 4880090

Nalin Limpivilas 4880604

Thank YouQ & A