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Reasons to align Mutual Benefit between the two parties .

Reasons to align Mutual Benefit between the two parties . Once we build up the alliance, which part of our organization may get improved . The Seven General Areas What IS In IT For You ? Back to Porter’s Five Forces WHERE & WHO. Why we build ALLIANCE ??.

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Reasons to align Mutual Benefit between the two parties .

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  1. Reasons to align Mutual Benefit between the two parties. Once we build up the alliance, which part of our organization may get improved. The Seven General Areas What IS In IT For You ? Back to Porter’s Five Forces WHERE & WHO Why we build ALLIANCE ??

  2. 7 general areasin which you can profit from building alliances • Products • Access • Operations • Technology • Strategic Growth • Organization • Financial Stability

  3. What Is In It For You??? • Technological Sophistication • Training • Increased Market Share • Improved Customer Service • Innovation • Cost Savings • Financial Stability • Buying Parity with Giants • Supply Chain Improvements • Productivity Increases

  4. Technological Sophistication • Lack of technological capability. • By Exchanging Technology • Compliment Basic Strengths • Shore Up Weaknesses • Improve Production Capability • Case: Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems • Kinko’s Product • Xerox’s Finance

  5. Training • Learning Curve Commitment • Obviously in Production Facility • Employees perform task more Efficiently • Cost savings passes along the curve as experiences are increased • May consider to Align with suppliers • Case: Toyota and its auto part suppliers • Toyota gave training to its suppliers to develop auto parts to achieve low cost strategy

  6. Training (contd.) • Training regarding the usage of products being sold is important to dealers. • Dealers can better serve end consumers • Higher Customer Satisfaction • Higher Sales • Improved internal structure • Case: Guggenheim Dental (dental supplier distributor) and their top customers

  7. Increased Market Share • Major factor that organizations partner with each other to form an alliance. • Many approaches to increase market share could be: • Co-Branding • Case: Barcadi and Coca Cola • Case: Nestle and Rold Gold Pretzels • Access to new market • Case: Copeland Corp. and Kirloskar • Decrease Direct Competition • Case: Sunmicrosystem and IBM • Barriers to entry by new entrant • Case: GTE and Pacific Bell

  8. Improved Customer Service • Provide better and quicker customer service while keeping their costs manageable. • Improved attitude toward customer service • Improved customer loyalty • Case: United Airlines & Starbucks • Improved product offering • Case: Associated Building Services

  9. Innovation • To differentiate oneself from competition • Invent new product to the Market • Case: Steel case and Peerless Lighting • Developed state-of-the-art Office Lighting • Annual sales furniture jumped from $15 billion to $35 billion • Differentiation and Less direct competition

  10. Cost Savings • Cost can be saved up in many areas • Manufacturing : Sharing resources, outsourcing • Case: Airbus and Rolls-Royce • Shared Location : Stores within stores have become common place through alliance relationships • Case: McDonalds and Wal-Mart

  11. Financial Stability • Risks are also be Shared among partners • Access to capital • Achieving EoS • Partnering with poor economy or recession • Case: Continental Airlines and Swan Optical

  12. Buying Parity with Giants • Better deal in parity with giants in their industry • Additional discounts and services for in-depth marketing and technical expertise. • Win/Win pricing between long term buyer/seller alliance • Case: American Dental Cooperative members (dental distributors)

  13. Supply Chain Improvements • Just-in-time inventory purchasing and supplying • Case: Wal-Mart and Proctor & Gamble • Other Benefits: • Management of supply channel conflict • On-time product delivery • Prompt response to complaints • Improved supply chain productivity

  14. Productivity Increases • Increase the ability for the companies to pull up their quality as well as the number of units being produced • Case: Brown & Root/Braun’s with Union Carbide Corp. • Partnering with the Experienced • Alliance can also increase productivity by: • Improve product quality • Improve working relationships • Improve communication • Improvement of products/services

  15. Conclusion • As from the article, we can observe that most of the areas are within realistic concerns and therefore could be overcome by forming an alliance and then we will be able to answer that “what’s in it for you!”

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