The Alliance Framework

1. The Alliance Framework

2. Three Fundamental Requirements of Success The Alliance Framework Agenda • The Definition of Success in Alliance Planning and Negotiating • Three Fundamental Requirements of Success • Linking the Alliance to the Business Strategic Plan • Long-Term Impact of Alliance Formation • The “Three Alliances in One” problem • Revealing the Business Strategic Plan Clearly and Honestly to the Other Party • Agreeing on Alliance Intentions, Commitments, Rights, and Limitations that satisfy the strategic plan of both firms • The Alliance Framework: What is it? • Alliance Framework Elements • Alliance Framework Process

3. The Definition of Success in Alliance Planning and Negotiating

4. Fundamental RequirementsofSuccess • Linking the Alliance to the Business Strategic Plan • Linking the goals and objectives of the alliance to the strategy of both organizations • What is the core need of the businesses? • Why?: If environment changes, it will affect all the partners in the same direction! • E.g. Tire manufacture

5. Fundamental RequirementsofSuccess • Long-Term Impact of Alliance Formation Companies lose controloftheirlong-termstrategy due topreviousdecisions • Positive Side of Path Dependence: Unanticipated opportunities

6. Fundamental RequirementsofSuccess The “Three Alliances in One”Problem • The effectiveness of every alliance depends on the ability of both firms to plan and execute all three alliances simultaneously. Company A Company B Marketing Marketing Alliance# 1 Alliance# 2 Alliance# 3 R&D R&D Manufacturing Manufacturing

7. Fundamental RequirementsofSuccess • Revealing the Business Strategic Plan Clearly and Honestly to the Other Party • Issue: Overexposure • Agree on an appropriate level of openness • Ability to strike a balance between sharing sensitive information and protecting both firms • Agreeing on Alliance Intentions, Commitments, Rights, and Limitations that satisfy the strategic plan of both firms

8. The Alliance Framework: What is it?

9. The Alliance Framework Elements: • Business Plan Summary • Objectives • Roles • Overall Resources • Boundaries • Market Model • Strategic Exclusivity • Intersections • Detailed Objectives • Detailed Resources • Financial Pie-Split • locates financial rewards and risks • Intellectual Property • Working Process and Governance • Term and Termination • specify how parties can exit the alliance

10. The Alliance Framework Process: