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STRATEGIC ALLIANCES More Value / Fewer Problems. IDENTIFY. INVESTIGATE. IMPLEMENT. INTEGRATE. “THE PATH TO SUCCESSFUL STRATEGIC ALLIANCES”. 4200 Montrose, Suite 590 Houston, TX 77006 (713) 522-9656 Phone (713) 522-9661 Fax www.wjmurray-assoc.com.
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STRATEGIC ALLIANCES More Value / Fewer Problems IDENTIFY INVESTIGATE IMPLEMENT INTEGRATE • “THE PATH TO SUCCESSFUL STRATEGIC ALLIANCES” 4200 Montrose, Suite 590 Houston, TX 77006 (713) 522-9656 Phone (713) 522-9661 Fax www.wjmurray-assoc.com
STRATEGIC ALLIANCES THAT WORK More Value / Fewer Problems IDENTIFY INVESTIGATE IMPLEMENT INTEGRATE • BENEFITS OF THE W J MURRAY & ASSOCIATES’ PROCESS: • Fewer false starts • Shorter cycle times • Alliances that fit the playbook • An organization to accomplish the alliance • Successful approaches to search for and value potential partners • Proven due diligence techniques • Effective integration techniques • Pitfalls are avoided • LEADING TO: SUCCESSFUL ALLIANCES
THE PATH TO SUCCESSFUL STRATEGIC ALLIANCES IDENTIFY INVESTIGATE IMPLEMENT INTEGRATE • Enterprise Strategy • *Vision, goals, the path • forward • Alternatives • *Internal development • *Alliance • *Acquisition • How Does An Alliance Fit • the Playbook? • Costs/Benefits of Alliance • Type of Alliance That • Match Costs/Benefits • *Horizontal: complimentary, • competitors • *Vertical: supplier/customer • *Joint development • *Joint venture • Initial Screening Criteria • *Be clear about the purpose • Alliance Process Execution • Team (APEX) • Partner Selection • Criteria • *Strategic compatibility • *Complimentary objectives • *Commitment • *Cultural fit • *Ability to add value over • the long term • *Past history • Engage the Search Engine • Complete Initial Screening • Gain Consensus on • the Short List • Complete Benefits • Contributions Matrix • Company Contact • Shared Business Plan • Structure of Alliance • APEX Team Game Plan • Operating Procedure • *Metrics • *Make it work provisions • Customer, Competitor • Regulatory Reactions • Risk/Reward Sharing • Methodology • Manage Employee Concerns • Harvest the “Low • Hanging Plums” • Communication • Staffing • Linking Budgets/Processes • Driving Costs Out of the • Systems • Managing the Path • Forward - The“Scorecard”
IDENTIFY WHO DOES IT Senior Managers Senior Managers Senior Managers Senior Managers/APEX Team Senior Managers/APEX Team Senior Managers/APEX Team Senior Managers/APEX Team • WHAT TO DO • Confirm the Enterprise Strategy • * The Business • * The Vision • * The Goals • * The Competitors • * The Value Proposition • * The Critical Success Factors • Gain Consensus That Partnership Is Better Than • Acquisition / Internal Development • * Be clear about the purpose of the alliance • (functional analysis) • Select Alliance Process Execution Team (APEX) • Demonstrate How the Partnership Supports the • Critical Success Factors • Strategic Alliance Versus Joint Venture • Expectations • * Contributions • * Benefits • Initial Screening Criteria • OUTPUTS • Enterprise Strategy • Internal Commitment • Reconfirmation of, • and Consensus to • Partnership • Decision on Strategic Alliance or • Joint Venture • Expected Benefits • /Costs • Initial Selection • Criteria • Alliance Process • Execution Team
IDENTIFY WHY ALLIANCE RATHER THAN INTERNALLY DEVELOP OR ACQUIRE? FAVORS ALLIANCE FAVORS INTERNAL DEVELOPMENT ACQUISITION COST ___ HIGH LOW TIME AVAILABLE FOR EXECUTION ______________________________________________________ SHORTER LONGER NATURE OF _________ ACTIVITY COMPLEMENTARY CORE ALLIANCE EXPERIENCE/ _____________________________________________________ EXPERTISE HIGH LOW AMOUNT OF CONTROL ______________________________________________________ LOWER HIGHER
IDENTIFY SAMPLE INITIAL SCREENING CRITERIA
INVESTIGATE • WHAT TO DO • Partner Selection Criteria • Engage Search Vehicles • * Customer/Supplier • * Business Network • * Board Members • * Law/Accounting Firms • * Banks • Complete Initial Screen • Gain Consensus On Short • List • Second Phase Screen Based • On Partner Selection • Criteria • Benefits/Contributions • Evaluation • Discuss with Management • Memorandum of • Understanding WHO DOES IT Senior Managers/APEX Team Senior Managers/APEX Team APEX Team Senior Managers/APEX Team APEX TEAM APEX Team Senior Managers/APEX Team Senior Managers/APEX Team • OUTPUTS • Criteria for Ranking • Candidates • Consensus on Top • Candidates • Advantages/Disadvantages • Associated With Prospective • Partner • Alliance Costs • * Management Time • * Dollars, Other Resources • Reaffirmation of Purpose • /Goals • Commitment to Continue
INVESTIGATE SAMPLE SECOND-PHASE SCREENING CRITERIA
IMPLEMENT • WHAT TO DO • Complete Negotiations • Discuss Exit Issues • Agree on Structure of Alliance • * How will the alliance work - define • the tasks and business processes • Sign Alliance Agreement • Align Operating Procedures/ • Metrics (Balanced Scorecard) • Address Customer/Competitor/ Supplier and RegulatoryConcerns WHO DOES IT Senior Managers/APEX Team Senior Managers APEX Team Senior Managers/APEX Team APEX Team Senior Managers/APEX Team • OUTPUT • Alliance Agreement • Alliance Structure • Metrics for Tracking • Performance • Clarity of Contributions • and Benefits
INTEGRATE • OUTPUT • Integrated Alliance • * Direction • * Commitment • * Metrics defined • * Budgets • * Key issues defined • * Roles and responsibilities • * RESULTS ACHIEVED • WHAT TO DO • Create Shared Business Plan • * Link Budgets / Process to Strategic Alliance • Managing “The Path Forward” • *Meeting Schedules • * Processes • Internal Communication • * Scope of Alliance • * Expectations • * How It Will Work • External Communication • * Customers • * Suppliers • * Other Potential Partners • Staffing • * People • * Rotation Schedule • Building Trust WHO DOES IT Senior Managers/APEX Team APEX Team Senior Managers/APEX Team Senior Managers APEX Team Senior Managers/APEX Team