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What is an Alliance Strategy?

What is an Alliance Strategy?. Agenda. What is an Alliance Strategy? Why do companies engage into an Alliance? Why do Alliance sometimes fail? Four Elements of Alliance Strategy: Alliance Design Alliance Management Alliance Constellation Alliance Capability Conclusion

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What is an Alliance Strategy?

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  1. What is an Alliance Strategy?

  2. Agenda • What is an Alliance Strategy? • Why do companies engage into an Alliance? • Why do Alliance sometimes fail? • Four Elements of Alliance Strategy: Alliance Design Alliance Management Alliance Constellation Alliance Capability • Conclusion • References

  3. Differences • Strategic Alliance This 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 Strategy An alliance strategy represents much more than a deal. It is an intent, a dynamic process, and a logic that guides alliance decisions.

  4. “A Strategic Alliance without an Alliance Strategy is condemned to fail”

  5. Why do companies engage into an Alliance? • 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.

  6. Number of Alliances formed

  7. Why do Alliance Fail? • 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

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

  9. Four Elements of Alliance Strategy Alliance Management • Process of making decisions • Operational decisions • Performance and relationship between the parent company and other company Example, Venture between Xerox and Fuji Photo Film was created to help Xerox sell copiers in Japan.

  10. Four Elements of Alliance Strategy Alliance Constellation • Should the alliance be formed? • How many and what type? • Interaction among alliances Example, The Star Alliance Case

  11. Four Elements of Alliance Strategy 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

  12. Conclusion • 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!!!!!

  13. References • 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

  14. ‘Group 2’ • Mai Tilogavichai 4780449 • Thivaphorn Narang 4780490 • Chinajade Yipyintum 4880090 • Nalin Limpivilas 4880604

  15. Thank You Q & A

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