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What is an Alliance?

What is an Alliance?. by Group8 Sec.2 4880569 Kampanart Padungvorasart 4980277 David Alexander Gray 4980359 Nattida Sathirathai 4980425 Sara Choi. Definitions of “Alliances”. Webster defines the word “Alliance” as

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What is an Alliance?

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  1. What is an Alliance?

    by Group8 Sec.2 4880569 KampanartPadungvorasart 4980277 David Alexander Gray 4980359 NattidaSathirathai 4980425 Sara Choi
  2. Definitions of “Alliances” Webster defines the word “Alliance” as An allying or close association, as of nations for a common objective, families by marriage An agreement for this The countries, groups, etc. in such association
  3. Definitions of “Alliances” connection Common understanding participation membership support affinity union cooperation relation agreement kinship affiliation collaboration bond partnership combination coupling coalition fusion
  4. Types of Alliances Sales Alliance Solution-Specific Alliance Geographic-Specific Alliance Investment Alliance Joint Venture Alliance
  5. Sales Alliance Sell complementary products Usually revolves around targeted clients or targeted industries
  6. Solution-Specific Alliance Jointly develop and sell a specific marketplace solution E.g. Whirlpool, Hearst and Boston Consulting Group Exclusivity may or may not be “in play” with solution specific alliances.
  7. Geographic-Specific Alliance Two companies agree to jointly market or co-brand their products and services in a specific geographic region. Very popular in the beer industry.
  8. Investment Alliance One company makes an investment in another company while at the same time developing an agreement to jointly market their products and services.
  9. Joint Venture Alliance Two companies come together and form a third company to specifically market and/or develop specific products and services. It usually means setting up a separate organization and financial structure, with ownership interests and incentives specified as the joint venture is established. There is a legal aspect to the alliance which protects interests, but a separation can be very painful.
  10. Real World Examples A solid investment in terms of organization and planning, but it did not take into account supply chain execution and real-time product promising and order status. Lets customers fill out an online questionnaire, and receive a purchase recommendation from dealers in the buyer’s geographic area. The buyer then receives real-time pricing and product availability from the retailer or dealer.
  11. Real World Examples Competition for Customer Relationships eMarketplace alliances compete for control of customer relationships. These relationships directly translate into purchase orders. For appliance sales, it is the major appliance retailers who own the customer relationships. These retailers have the on-site appliance inventories (or knowledge of their regional warehouse inventories) and can commit to specific delivery dates and times. Maytag.com took this customer centered approach into consideration, and succeeded in the alliance, whereas Brandwise.com did not, and failed within two years.
  12. Framework to Determine The Need for an Alliance Business and Market Strategy Marketplace Scan Product Portfolio Assessment vs. Marketplace Scan “Build Internally” vs. “Acquire Externally” Organizational Readiness and Speed to Market Demand Proceed to “Build Internally” or “Acquire Externally”
  13. Framework to Determine What Type of Alliance Is Needed Do you need an Alliance that is Sales-Based? Is there a Need for Joint Solution Development? Is the Need Geographic-Based? Is there a Necessity for a Direct Investment in the External Company Is there an Overriding Reason to Set Up a Company to Acquire the Needed Products and Services from the External Provider? Pulling Together the Answers from the Framework
  14. Real-World Examples
  15. Summary The need to rapidly recognize the need for alliance partners and select the right alliance partner may determine being a world-class company and an average company. The “Framework to Determine the Need for an Alliance” let you determine whether or not an alliance is needed. After it has been decided, then the “Framework to Determine What Type of Alliance Is Needed” provides a map into the five types of alliance. The combination of the two frameworks will establish successful alliances.
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