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What is an Alliance?

What is an Alliance?. Building, Leading and Managing Strategic Alliance By Kuglin and Hook. Sirinan Saeueng 4880366 Sirot Sawangsawai 4880394 Bhuk Kiranantawat 4880487 Waraporn Chianwatanasuk 4880605 Tanai Techasmit 4980625. Alliance.

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What is an Alliance?

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  1. What is an Alliance? Building, Leading and Managing Strategic Alliance By Kuglin and Hook Sirinan Saeueng 4880366 Sirot Sawangsawai 4880394 Bhuk Kiranantawat 4880487 Waraporn Chianwatanasuk 4880605 Tanai Techasmit 4980625

  2. Alliance Alliance: two or more parties coming together to set an agreement or goal Types of Alliance • Sales alliance • Solution-specific alliance • Geographic-specific alliance • Investment alliance • Joint venture alliance

  3. Types of Alliance • Sales Alliance - The focus is to create sales. - Benefits • Create competitive advantage • Reduce cost of sales • Grow revenue through sales - Exclusivity is not required. • Solution Specific Alliance - The focus is joint selling of a jointly developed solution. - Exclusivity may or may not be required. - Specific parameters and incentives for both parties to maximize return.

  4. Types of Alliance • Geographic-Specific Alliance - Focus is to expand their products and services in a specific geographic region. - Benefits • Reduce transportation costs • Avoid trade barriers • Faster expansion • Grow revenue through sales • Investment Alliance - Happens when one company makes an investment in another. - Example: Hearst and Boston Consulting Group and Whirlpool and Brandwise.com

  5. Types of Alliance • Joint Venture Alliance - Occurs when two companies form a separate company to market and/or develop a specific products and services - Example: Northern Telecom and Motorola

  6. Mission and Vision of the corporation major objectives company’s market strategy Framework to Determine the Need for an Alliance • Whether an Alliance relationship is needed? • Step 1: Business and Market strategy • How company’s products are incorporated into total “customer satisfaction”? • Components of marketing strategy • Product portfolio • Strategy & capital expenditure • Associated marketing programs • aim to serve customer’s satisfaction

  7. Framework to Determine the Need for an Alliance • Step 2: Marketplace Scan – 4 Stages I. Review of existing competitors & their current market shares II. Review of existing competitors against the identified total “customer solution” III. Identification of new competitors IV. Identify non-total-customer solution providers which refer to all intermediaries in marketing process. • Step 3. Product Portfolio Assessment vs. Marketplace Scan - Identify current product & service in company’s product portfolio - Find the keys to drive competitors forward - Eliminating gap of positioning in the marketplace between company and competitors.

  8. Framework to Determine the Need for an Alliance • Step 4: “Build Internally” vs. “Acquire Externally” - First choice, do nothing and give specific market segment to the competitors. -Second Choice, create technology in a corporation - Third Choice, “acquire externally” A Corporation should determine the cost and benefit analysis • Step 5: Organizational Readiness and Speed to Market Demand - Does the corporation is ready to build internally? - Does the products are needed? • Step 6: Proceed to “Build Internally” or “Acquire Externally” - Consider step 4 and 5 - If acquire externally, make sure that the products and services match with the total customer solution and enhance the companies’ gaining.

  9. Framework to Determine What Type of Alliance Is Needed • Do you need an alliance that is sales-based? - All alliances must be either directly or indirectly related to sales-based. Otherwise, consider “Work for Hire” • Is there a need for joint solution development? - It is only needed in the solution-specific, investment and joint ventures. • Is the need geographic-based? - This is necessary for geographic-specific and joint ventures but sometimes can be related to sales-based alliance. • Is there a necessity for a direct investment in the external company? - Usually required by investment and joint ventures. • Is there an overriding reason to set up a company to acquire the needed products or services from the external provider? - Only in joint ventures

  10. Framework to Determine What Type of Alliance Is Needed • Pulling together the answers from the framework • - Look horizontally and vertically and compare the answer to the framework to find the match of alliance type.

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