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ID: 5280618
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CHAPTER 1
OPPORTUNITIES AND IMPERATIVES
Content
 Introduction
 The rationale for the alliances
 Defining strategic alliances
 Ford Motor Company & Mazda Motors
 Strategic Alliance Objectives
Introduction
Strategic Alliance as a diver of superior growth:
 ROI of 17 % during 10 years
 The revenue increased more than double
 In 2002 the amount of alliances exceed 35 %
It is time to move from “I own this” to “We must work
together”
Strategic Alliances as a way to:
 To gain competitive advantage
 Enrich customer value
 Drive markets
 To fill critical capability gaps
Introduction
Strategic alliances are complex process
 Business Fit
 Implementation Issues
New Key Questions
 When do we consider alliance as an option?
 How long can we wait?
 The US got high purchasing power
 Russia had skill s and experience in aerospace industry
 The alliance were planted in 1993
 The Tu-144 became Tu-144LL
 The new of corporation alliance is
- the strategies
- the scope
- the distinction to other business relationships
The Rationale for Alliances
 Many companies are not able to achieve their goals
 The competitions in the market are also intense
 The major forces that create the alliance
- The globalization of markets
- The search for capabilities as the rapid technology shift
- The scarcity of resources and intensifying competition of markets
The New Reality
 Macro-environmental forces:
 Globalization
 Integration of markets
 Rapid changes in technology:
 High costs
 R&D
 Short product lifecycle
The Rationale for Alliances
 Increased global competition
 Scarce resources
 Shortening of the period of competitive advantage
 Emergence of new regional trading blocs
 The companies have to enhance their core competencies
through new knowledge and capabilities
The Rationale for Alliances
The example of Oracle System
 Shift from vertical integration to outsourcing and virtual
corporation
 Adopt new vocabulary
- Coopetition -> be able to learn to a partner and a competitor
at the same time
- Complementarity -> None of the competitors have the
same or the overlap business scope
The Rationale for Alliances
The Growth of Capabilities
When the company faces strategic gaps in critical
differential capabilities that are too expensive or will take too
long to develop internally, they ally with other companies in
order to access to a subset of another’s capabilities.
In a strategic alliance, companies can select, build, and
deploy the critical capabilities that will allow each of them to
gain competitive advantages, enhance customer value, and
drive markets.
Ex. Ford Motor Company and Mazda Motors
Defining Strategic Alliances
Transactional Alliances
 Last less than 5 years
 Partners do not share critical capabilities and common strategy
 The relationship does not involve control and is usually
contract driven
Forms of transactional alliances
 Collaborative advertising or marketing
 Shared distribution
 Cross-licensing
Ex.
- American Express and Toys-R-Us
- Nissan and Volkswagen
- Dreamworks and Universal Pictures
Defining Strategic Alliances
Strategic Alliance
 A commitment of at least 10 years
 A linkage based on equity or on shared capabilities
 A reciprocal relationship
 An increase in companies’ value in marketplace
 A willingness to share and leverage core capabilities
Ex. - Cytel and Sumitomo Pharmaceuticals
- Toshiba, Siemens, and IBM
- Microsoft and NBC
Strategic Alliance Objectives
 Risk sharing (unable to afford the risk)
ex. Kodak with three camera makers
 Economies of scale ( have high fixed cost)
ex. British airways and American airline
 Market segment access (lack of customer understanding)
ex. Wal-mart and Cifra
 Technology acess (can not develop technology by yourself)
ex. IBM, Motorola, and Apple computer
Strategic Alliance Objectives
 Geographic access (difficulty in penetrating a -foreign
market)
ex. Anheuser-Bush and Kirin
 Handling of funding constraints (large -development
cost)
ex. Lockheed and pentagon
 Skills leverage (access skill faster at lower cost)
ex. Glencore and Metaleurop
 Value-added barriers to competition (want to
strengthen skills and raise the level of competitive
intensity)
ex.Washington post company and Russian publisher
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