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The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge.

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Presentation on theme: "The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge."— Presentation transcript:

1 The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge.

2 AGENDA: The Power of Strategic Alliances What is a strategic alliance? Strategic alliance attributes and dynamics Identifying when a strategic alliance can help your business Identifying goals from a strategic alliance Identifying potential partners Screening the potential partner Assessing your own readiness to become a strategic partner Embarking on the process of forming a strategic alliance Negotiating the deal Documenting the deal Monitoring the progress of the alliance Expanding or ending the alliance Strategic alliances with employees

3 . What is a strategic alliance?

4 What is a strategic alliance? An Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a business need while remaining independent organizations. An Alliance is Strategic when it: 1. Is critical to the success of a core business goal or objective. 2. Is critical to the development or maintenance of a core competency or other source of competitive advantage. 3. Blocks a competitive threat. 4. Creates or maintains strategic choices for the firm. 5. Mitigates a significant risk to the business

5 What is the real value of a strategic alliance?

6 A Strategic Alliance can be a way for businesses and individuals to grow, solve problems, take advantage of opportunities in a cost effective, accelerated fashion.

7 What are some specific reasons to form a strategic alliance?

8 Reasons to form a strategic alliance enter new markets create new technology that will become an industry standard shape consolidation gain economies of scale eliminate excess capacity harness a partners energy and knowledge learn something reduce risk gain global reach gain speed enhance product development develop new business opportunities through new products and services diversify

9 What are some examples of strategic partners?

10 Examples of strategic partners 1.Employees 2.Key Suppliers 3.Major Customers 4.Banker/investors 5.Attorney 6.Accountant 7.Insurance agent 8.IRS and other government agencies 9.Competitors 10.Special partners (ex. long term relationships with mentors, trusted friends, universities, consultants, organizations such as SCORE, professional and industry organizations)

11 Could you ever use a Strategic Alliance?

12 How can you identify areas of need for an alliance opportunity?

13 Initial Assessment Tool: Potential for Strategic Alliance

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15 Can you use Strategic Alliances? See how you compare with the competition.

16 Initial Assessment Tool: Potential for Strategic Alliance

17 Strategic alliance dynamics Six common attributes of successful partnerships: 1. Character - the combination of qualities or features that distinguishes one person, group, or thing from another. Integrity - steadfast adherence to a strict moral or ethical code. Honesty - marked or displaying integrity, upright; not deceptive or fraudulent, genuine; characterized by trust, not false; sincere, frank 2. Trust - firm reliance on the integrity, ability, or character of a person or thing. 3. Open communications - a process by which information and ideas are exchanged freely between two parties 4. Fairness - having or exhibiting a disposition that is free of favoritism or bias, impartial; just to all parties, equitable 5. Self-interest of both partners - there must be something in it of an economic or otherwise beneficial nature for both partners 6. Balance of rewards vs. risks and/or resources required - the partnership cannot be too lopsided

18 Strategic alliance dynamics Questions to ask yourself 1.What is the purpose of the partnership/alliance? 2.What are the benefits to each partner from the alliance? 3.What is working well in the relationship and what could work better? 4.What contributions do you make to the relationship? What contributions does the partner make? 5.How are decisions made? 6.How are disagreements resolved? 7.What information is shared? How is it shared? 8.How do you and your partner contribute to the success of the other party? 9.On a scale of 1 to 10, with 10 being the highest, how do you rate the success of the relationship?

19 Assessing a Potential Strategic Alliance Questions to ask yourself 1.What is the relative value of the partnership or alliance? 2.How willing is this potential partner to form an alliance? 3.What is the level of trust or the possibility of mutual trust? 4.What is the prospects track record of character and ethics? 5.Does the prospect have comparable aspirations? 6.Does the prospect have a similar culture?

20 Assessing a Potential Strategic Alliance Questions to ask yourself 7.Is there a consistent direction for both companies? 8.Are goals and interests of both companies fairly equal? 9.Can both partners share relevant information liberally? 10.Are the risks shared fairly and equally? 11.Are the potential rewards shared equally and fairly. 12. Does the smaller partner have adequate resources to support the larger?

21 Assessing a Potential Strategic Alliance Questions to ask yourself 13. Can the partners agree on the duration? 14.Is top management support present in both companies? 15. Is commitment level broad for both partners? 16. Do partners have substantially similar perception of the value the other brings to the partnership? 17. Do the rules and polices reinforce desired partnership behavior?

22 Mechanics of Strategic Alliances

23 Traditional alliance processes include: 1.Strategy and analysis 2.Partner selection and relationship development 3.Alliance management and metrics

24 Initial Assessment Tool: Potential for Strategic Alliance

25 Quick Tips on Monitoring, Expanding, and Ending a Strategic Alliances Good drafting Create a learning alliance Honest flow of information Quick action Engaged TQM

26 Action Plan for Forming Any Strategic Alliances

27 Strategic Alliances with Employees

28 REVIEW: The Power of Strategic Alliances What is a strategic alliance? Strategic alliance attributes and dynamics Identifying when a strategic alliance can help your business Identifying goals from a strategic alliance Identifying potential partners Screening the potential partner Assessing your own readiness to become a strategic partner Embarking on the process of forming a strategic alliance Negotiating the deal Documenting the deal Monitoring the progress of the alliance Expanding or ending the alliance Strategic alliances with employees


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