Why we build ALLIANCE ??
 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
7 general areas in which you can profit from building alliances
 Products
 Access
 Operations
 Technology
 Strategic Growth
 Organization
 Financial Stability
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
Technological Sophistication
 Lack of technological capability.
 By Exchanging Technology
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Compliment Basic Strengths
Shore Up Weaknesses
Improve Production Capability
 Case: Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems
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Kinko’s Product
Xerox’s Finance
Training
 Learning Curve Commitment
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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
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Toyota gave training to its suppliers to develop auto parts to achieve low cost strategy
Training
(contd.)
 Training regarding the usage of products being sold is important to dealers.
 Dealers can better serve end consumers
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Higher Customer Satisfaction
Higher Sales
Improved internal structure
 Case: Guggenheim Dental (dental supplier distributor) and their top customers
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
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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
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
Innovation
 To differentiate oneself from competition
 Invent new product to the Market
 Case: Steel case and Peerless Lighting
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Developed state-of-the-art Office Lighting
Annual sales furniture jumped from $15 billion to $35 billion
Differentiation and Less direct competition
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
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
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)
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
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
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!”