10.01
Intel's Manufacturing Strategy
World's largest semiconductor company
Two dominant products:
Microprocessors
Flash memories
Multiple manufacturing sites for the
same product
Huge volumes at each site
D. ROUACH, ESCP-EAP
10.01
Reasons for Semiconductor Alliances
Competitive Alliances:
share costs, resources and technology
reduce risk and time-to-market
raise customer confidence in success
improve customer sourcing position
Non-Competitive Alliances:
diversify into new business or technology
guarantee source of supply
D. ROUACH, ESCP-EAP
10.01
Copy EXACTLY!
Transfer of new technologies in both new
and existing factories accomplished in record
time
Less startup problems and faster time to
resolve them
Equal productivity from the start
One learning curve
Less problems, therefore more resources per
problem
Source: C.J. McDonald, Intel
D. ROUACH, ESCP-EAP
10.01
The future of AT&T
in Europe depends on its alliances
AT&T is building a strong network of partners in Europe
Unisource (Sweden, The Netherlands, Switzerland) in 17
countries
Telecom Italia (Europe and Latin America)
Local Partners (France, Germany, Italy)
Our services development depends on our alliances
Business services (Communications, On-line)
Consumer services
World Partners for global reach
The growth of European customer base is the keystone to
develop
US skills transfer
Value added services
Commercial attitudes
Source : AT&T
D. ROUACH, ESCP-EAP
10.01
Map of overseas laboratories
(National/Panasonic)
PTI/Technoresearch Office
PTI/Boston Office
PTI/TAD-East
PTI
MIERL
PTI/TAD-West
CSTL
PTI
STL
MADC
PDC
ATVL
PTI
KMERL
Corporate
Laboratories:
Global mission
Regional mission
Division
Laboratory
Corporate
Organization
MARL
AVTC
PTI
MITL
MCC
PERDC
PTI
MITT
PTI
MTV
R&D Center
MACRAD
AMS
AVIRC
ATVL: Panasonic Adv. TV - Video Laboratories, Inc.
AVIRC: AV/Information Research Center
CSTL: Communication Systems Technology Laboratory
MARL: Matsushita Applied Research Laboratory
MITL: Matsushita Information Technology Laboratory
MITT: Matsushita Electric Institute of Tech. (Taipei) Co.,Ltd.
PERDC: Panasonic European R&D Center (Panas. Europe (HQ) Ltd.
PTI: Panasonic Technologies, Inc. (parent company for 6 US-based R&D Laboratories
STL:Speech Technology Laboratory
TAD: Technology Administration Div.
D. ROUACH, ESCP-EAP
10.01
Knowledge Management Matrix
Know
Don't know
Know
EXPLICIT
knowledge
Known
Gaps
Don't know
TACIT
knowledge
Unknown
Gaps
Source: Conference MBA, Lars Ch. Smith
D. ROUACH, ESCP-EAP
10.01
Knowledge Management Matrix
"Chief knowledge Managers"
Know
Don't know
Know
Knowledge that
you know you
have
Knowledge that
you don't know
that you have
Don't know
Knowledge that
you know
you don’t have
Knowledge that
you don't know
that you don't
have
Source: Conference MBA, Lars Ch. Smith
D. ROUACH, ESCP-EAP
10.01
Coopetition
« If you cannot beat them »
Prod. by MrJR (-:
Join them !
American Proverb
D. ROUACH, ESCP-EAP
10.01
Coopetition
« Who is my client in the morning,
my rival in the afternoon,
- Jack Welsh Chairman of General Electric
Prod. by MrJR (-:
and my supplier in the evening? »
D. ROUACH, ESCP-EAP
10.01
Gemplus, Alliances and partnership
The development of alliances and partnerships is part of
Gemplus’ strategy to benefit from external sources and
competencies.
Cooperation
The co-operation agreement covers joint marketing
sales and development efforts in the smart card market.
The agreement brings together the card technology of
Gemplus with IBM’s systems capabilities and expertise,
and will involve development of multi-application cards,
for use in electronic commerce and other electronic
business transactions.
D. ROUACH, ESCP-EAP
10.01
The industry is
dominated by well established players….
Chip
Card
Manuf. Manuf.
ST
Siemens
Hitachi
Philips
Motorola
Gemplus
Bull
G&D
Terminal System
Suppliers Integ.
Ingenico
Dassault
Hypercom
Schlumberger Verifone
Oberthur
IBM
S/Ware
End
User
Sun
IBM
Microsoft
Bul
Informax
Ski Data
Cap Gemini
D. ROUACH, ESCP-EAP
10.01
Strategic Alliances; a vital need...
Now that Gemplus has gained sufficient scope and
maturity; it is replacing its original sole financial
partners with investors from the manufacturing
and service industries who have a strategic interest
in a link up with Gemplus.
Horizontal
Integration
Market penetration
and development
Sharing
Technology
Finance to reach
critical size
D. ROUACH, ESCP-EAP
10.01
The main difficulties
in technology alliances are managerial
TYPE OF PROBLEM
FREQUENCY
Different priorities of the involved companies
52%
Difference in company culture
42%
Change in strategies / priorities
39%
Lack of technical competence on partner ’s side
25%
Difficulties to adapt the cooperation to
new commercial conditions
23%
Difference in organizational level status of
concerned staff
23%
Changes in ownership
21%
Source: Hakanson & Lorange, 1988 by Francis Bidault
D. ROUACH, ESCP-EAP
10.01
Innovating all together?
Technological Alliances
Increasing technological integration:
Data-processing and telecommunications
Micro-electronics
Composite materials and optical technologies
Increasing sectors integration:
Agriculture, chemistry and energy, telematics
and mass media
Direct or indirect covering of every potential sector
D. ROUACH, ESCP-EAP
10.01
The boomerang
effects of
technology
transfers
THE RISKS
Innovating all together?
D. ROUACH, ESCP-EAP
10.01
Innovating all together?
Innovation as a necessary Competitive instrument
The technology as an innovation support
Technology
Innovation
Competitiveness
Key question: How to detect technologies likely to
bring a competitive advantage?
Answer:
The Technological and Competitive
Intelligence
D. ROUACH, ESCP-EAP
10.01
Innovating all together?
The risks: The Infeudation
In the case of an exclusive transfer,
the company can progressively increase
its dependance on the partner's technology,
and then be assimilated by him.
The risk of loosing its independence
D. ROUACH, ESCP-EAP
10.01
Innovating all together?
The risks : "the trojan horse" :
The partner can have
hidden intention
Not transferring everything he promised
to give,
Taking more than what he asked for,
Trying to weaken the company or to
increase its dependance towards him.
D. ROUACH, ESCP-EAP
10.01
Global alliance
in Smart Cards systems will provide benefit to all actors
Chip Silicon
Suppliers
Card
Suppliers
Terminals
System
& Applicative
Developpers
Software
Suppliers
Build
and
operate
new
businesses
By creating new markets opportunities !
But
Silicon suppliers should be much more involved
at the beginning of the process :
Standards
Definition of key products
Value added on Silicon
D. ROUACH, ESCP-EAP
10.01
The future of Smart Cards businesses depends on
Partnerships
1 Build a new business environment :
Smart Card replacing Paper
Computer processing replacing manual or
semi automatic processing & Information System
New era of interactive information systems:
VISA, Master Card... or Microsoft, Oracle, Netscape, etc.
2 Card manufacturer should be able to provide complete
solutions by effective alliances withterminals providers
Software companies
System integrators
D. ROUACH, ESCP-EAP
10.01
Smart Cards partnership programs :
1
Silicon
Supplier
Internal
1
Internal
License
Distributors &
value added
resailers (VAR)
JV
JV
2
2
Design of
new
products
Buying
components
&
modules
Production
Cards
&
CommerPrinting
cialization
Personalization
Partnership
programs
-Terminals
-Suppliers
-Integrators
3
Direct sales
to key account
D. ROUACH, ESCP-EAP
10.01
General cooperation agreements : anchor point
Common
Research
Research
contract
Engineering
contract
Common
purchase Subcontracting
Designing Supplying
Trademark
licence
Patent
Consortium
licence
(common
marketing)
Common
production
Producing
Marketing
Distribution
agreements
Delivering
Ways of...
D. ROUACH, ESCP-EAP
10.01
Scope of Alliance Activity
Is it a tactic or a Marriage?
A Long Term
Marriage
Broad
Narrow
A Short Term
Tactic
Short
Expected Duration
Long
D. ROUACH, ESCP-EAP
10.01
What do you want from your partner,
after the deal is done?
Nothing
All we wanted was
the cash,
the nationality,
the brand name,
the patents rights,
access to
your distribution
A One Time
Transfer
Just teach us
To use your
technology
Ongoing managerial
Input matched by us
A true
partnership
Combining
brains and
resources
D. ROUACH, ESCP-EAP
10.01
Keeping an Alliance Healthy
Monitor the state of the partner relationship,
and adjust payoffs and processes as you go.
Watch for "strategic space" collisions, between
alliance and parents.
Put some of your best managers in alliances
and at the partner interface. "Good cop,
bad cop" bard members.
Recognize and manage cultural differences.
Communicate, more than you think is reasonable.
Do not "micro" manage, from the parent level.
If the alliance has served its purpose, end it.
D. ROUACH, ESCP-EAP
10.01
What are the alternatives?
Go it alone...
Form an alliance...
Make an acquisition...
Pros
Pros
Pros
Working with familiar
people and resources
Fast decision making
Control
Risk sharing
Economies of scale
Quick access to
resources and skills
Political necesity
Learning opportunity
Achieve major
change quickly
Control
Cons
May be too financially
risky
May be too slow
May need help
Cons
May be difficult to
manage well
May prove inflexible
Cons
Expensive
Integration may be
difficult
Irreversible
D. ROUACH, ESCP-EAP
10.01
To Get Partnership and Alliances "Right"...
Should we?
Alliance Design
What do we
really need?
Scope and duration
What are
the options?
Rewards and
risks of each?
Type of alliance
Partner choice
Ownership
Payoffs
Operating over
time
Reacting to
unexpected
events
Adjusting
original
design and
payoffs
D. ROUACH, ESCP-EAP
10.01
Desired Partner Characteristics
The "Three C's"
Importance
Low
Medium
Level
High
Low
Medium
High
Capability
Compatibility
Commitment
D. ROUACH, ESCP-EAP
10.01
Implementing Technology Transfer strategies
BUYING
DEVELOPING
AUTONOMOUS WAY
COOPERATIVE WAY
Internal R&D
Joint R&D agreement
« Intraprenariat»
Common R&D
subsidiary company
R&D consortium
Licence SWAP
Subcontracted R&D
Joint licence
Licence purchasing purchasing
Joint acquisition of
Investment in an
an innovating
innovative company company
D. ROUACH, ESCP-EAP
10.01
Definition
Alliances
Stand alone
Transactions
Joint venture
Merger
An alliance is any formal arrangement between two or more
independent or organisations for purposes of mutual gain
through cooperation for a limited period of time
Source : KMPG
D. ROUACH, ESCP-EAP
10.01
Forming global alliances and Network organisations
Companies try to find new competitive space and build
business outside their business column
New surprising combinations of Technology areas; more
and more converging branches
Changing configurations between companies towards
active networks
Trans cultural collaboration becomes more rule that
exception
Learning organisations are better equipped to master
the business dynamics
« The Company of the Future combines all these elements »
Source : KMPG
D. ROUACH, ESCP-EAP
10.01
In general strategic alliances are underperforming
Success rate of alliances is only a meagre 30 – 40 %
Alliance-formation is not a common management skill
Underestimation of ‘soft’ aspects
(company culture, chemistry of persons, commitment)
Nevertheless sharp increase
in number of alliances is to be expected
Source :
KMPG survey 1996/97
D. ROUACH, ESCP-EAP
10.01
Alliances brings management in paradoxal situation
Past way of thinking: Control + To be in control
is normal practice in business
But……
?!
Companies can’t do it all alone anymore;
too much to handle
Alliances are a way out, but at the same
time you loose control
a low ‘Comfort level’
Challenge: Increasing the level of comfort
Source : KMPG
D. ROUACH, ESCP-EAP
10.01
The Base for alliances: Commitment
Reputation
Teamwork
Act, without escapes
Small steps
Contract
Commitment
Contract
« Think in terms of credible commitments »
Source : KMPG
D. ROUACH, ESCP-EAP
10.01
importance
Gradually the importance
of ‘soft’ issues is regocgnised
Source : KMPG
t
D. ROUACH, ESCP-EAP