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What is Alliance Strategy ?

What is Alliance Strategy ?. Group 4. C o n t e n t. Definition of Alliance. What is alliance? Answer: a strategy that used to fulfill a broad range of corporate goal, including; Gaining scale. Reducing costs. Accessing new skills. Product or market. Sharing risk.

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What is Alliance Strategy ?

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  1. What is Alliance Strategy? Group 4

  2. C o n t e n t

  3. Definition of Alliance What is alliance? Answer: a strategy that used to fulfill a broad range of corporate goal, including; • Gaining scale. • Reducing costs. • Accessing new skills. • Product or market. • Sharing risk. Characteristics of Alliance • Agreements between 2 or more separate firms. • Flexible contract. • Joint decision making.

  4. introduction • Todays, about 20-50% of alliance are being implement in corporate value. • Many firms have been successful in implementing alliance into their company, such as Starbuck, IBM, Eli Lilly, and Corning Glass. • However, up to 30-70% of alliance failed. • So, what are the reasons behind the failure of those alliances?

  5. What make the alliance failed? • Unclear Strategies. • Poor partner choice. • Unbalanced alliance economics. • Dysfunctional governance. • Clashing corporate culture & goal. • Lack of sufficient operating staff skill and parent commitment.

  6. Get TO THE RIGHT DIRECTION!!! • Instead of focusing on the “ strategic alliance”, managers should focus on “alliance strategy”, because strategic alliance without an alliance strategy is likely to failed. • Strategic Alliance: A deal, a new venture, an organization. • Alliance strategy: an intent, a dynamic process, a logic that guide alliance decisions.

  7. Develop “alliance strategies,” not“strategic alliances” . . . 1. Let business strategy drive the alliance logic. 2. Design the alliance to fit the strategy. 3. Grow relationships, don’t just “do deals”. 4. Use constellations of alliances, not stand-alones. 5. Organize internally to cooperate externally.

  8. The 4 factors of alliance strategy

  9. The 4 factors of alliance strategy • Alliance Design: identify the role of alliance in the business strategy, including: • Setting the goal. • Scope of alliance. • Determining the criteria & method for selecting partner. • Crafting the structure& process for shaping value and decision making in the alliance.

  10. The 4 Factorsof alliance design • What are the goals of the company? • Which partner should the company select to alliance with in order to meet the goals? • How should the Alliance be structured? • Which type of Alliance would be suitable? • What is the process of adjusting or terminating an alliance ?

  11. The 4 factors of alliance strategy • Alliance management:how partners of alliance make continual investment of effort and adjust their relationship in response to new circumstances. • The success of alliance depends much on the unfolding relationship between the partners. • What will be the process of making decisions? • Example:will there be a meeting with a CEO every time a decision has to be made or are the mangers of the department allowed to make the decisions?

  12. The 4 factors ofalliance strategy • What are the terms & relationship between the parent company and our company?

  13. The 4 factors of alliance strategy • Alliance Constellation:the collection of alliance that fits together, collection are often important for companies-in-system-on-network-type business. • How many and what type? • Should the alliance be formed?

  14. The 4 factors ofalliance strategy • Alliance capability: how a supportive internal infrastructure can create a successful of external alliance. • Alliance capacity normally seek ways to share best practices among it business units and to develop special expertise where it is needed. • The more capability the more selections of partners.

  15. The success of one depends on the other.

  16. Mastering Alliance Strategy • Determine how alliances fit in your strategy. • Collect and analyze your own experience. • Develop and introduce alliance tools. • Coordinate your alliance activities. • Find and internalize “best thinking”.

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