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Selecting the Partner  Supplier  Customer  Professional &Trade association  Newspaper & Trade magazine  Seminars & Convention  Internet Finding a Partner

Selecting the Partner Find a partner that:  Share your values & vision  Can bring skills & experience  Offer resources & credibility  Financially & functionally stable  Good business ethics Business Partner Selection

Selecting the Partner Trust Tolerance Cooperation Commitment Mutuality Qualities in a Partner

The Alliance Framework Step6 Negotiating an Agreement Step5 Selecting the Partner Step4 Conducting Resource Fit Assessment Step3 Approaching Potential Partners: Strategic Fit Assessment Step2 Achieving internal Consensus Step1 Appointing the Planning and Negotiating team Step5 Selecting the Partner

The Alliance Framework Step5 Selecting the Partner  Which potential partner presents the least trouble some disagreements in Strategic Assessment Elements (SAEs), to be resolved in step 6 Final negotiations?  Which potential partner provides the best match of required resources?  Which potential partner has self-selected itself into the deal?

Step6 Negotiating an Agreement Step5 Selecting the Partner Step4 Conducting Resource Fit Assessment Step3 Approaching Potential Partners: Strategic Fit Assessment Step2 Achieving internal Consensus Step1 Appointing the Planning and Negotiating team The Alliance Framework

The strategic Fit Reconciliation Map 3 possibilities in dealing with SAE disagreements 1. Agree with the partner’s position 2. Convince the partner to agree to your position 3. Develop a compromise between the two positions

Strategic Fit Reconciliation Map Strategic Assessment Element (SAE) Our Firm’s Position Partner 1Partner 2Partner 3 Our Objectives Their Objectives Our Roles Their Roles Our Overall Resources Their Overall Resources Boundaries Market Model Strategic Exclusivity Intersections Note: Symbol meaning OK = The partner accepts our position on the SAE. ? = We have a disagreement and are unsure of the resolution. The strategic Fit Reconciliation Map

Pet Food Company  Alliance to incorporate novel nutrition ingredients into its pet foods  Trying to find the best selected partners between company A and Company B  The goal: to jointly develop a series of new products with a biotechnology firm  Adding the biotechnology firm’s nutritional ingredients to the pet food company’s existing product lines and distribute the improved products through its distribution

Following Step 3: Strategic Fit Assessment Objectives: “The pet food firm will establish and maintain its reputation for innovation through sole branding of any jointly developed product.” Market Model: “The customers will see the pet food company brand, not the biotechnology company’s brand, on the product.” Market Model: “Any jointly developed product will be cobranded.” The Pet Food CompanyCompany A

The pet food company Strategic Exclusivity Element: “The pet food firm will have global, perpetual, and sole rights to use the partner’s novel nutrients in pet food.” Company B Strategic Exclusivity Element: “Company B will give the pet food firm a one- year exclusive right to use the nutrient, after which company B will be free to provide licenses to others.” Following Step 3: Strategic Fit Assessment The Pet Food CompanyCompany B

Strategic Fit Reconciliation Map for Pet Food Alliance after Step 3 SAEPet Food Company Position Company A Company B Our ObjectivesSole brand? (cobranded) OK Market ModelSole brand? (cobranded) OK Strategic Exclusivity Exclusive rights OK? (one-year head start) OK = The partner accepts our position on the SAE. ? = We have a disagreement and unsure of the resolution. Strategic Fit Reconciliation Map for Pet Food Alliance after Step 3

Resolving the Disagreements  Looping back to the our objectives statements of step2 and other relevant elements.  Challenged the original thinking with the new information.  For example, Is sole branding necessary?  Can the pet food company label the products as “jointly developed with company A” and still achieve its marketplace objective?  Will a one-year head start allow the pet food firm to establish a strong enough foothold in the marketplace to fend off the competition? Step6 Negotiating an Agreement Step5 Selecting the Partner Step4 Conducting Resource Fit Assessment Step3 Approaching Potential Partners: Strategic Fit Assessment Step2 Achieving internal Consensus Step1 Appointing the Planning and Negotiating team

Strategic fit Reconciliation Map for Pet Food Alliance after loop-back through step 2 SAEPet Food Company Position Company ACompany B Our ObjectivesSole brandOK Market ModelSole brandOK Strategic ExclusivityExclusive rightsOKX OK = The partner accepts our position on the SAE. = We have a disagreement, but the partner’s position is acceptable to us. X = We have a disagreement and cannot accept the partner’s position.

Resource Fit Reconciliation Map Key ResourceCompany A Company B Ability to contribute to joint development of products based on preexisting nutrients OKOK+ Ability to provide technical support for jointly developed products OK Ability to develop future nutrients OK+ OK+ = The partner’s resources are outstanding and complementary to ours. OK = The partner’s resources are satisfactory and complementary to ours.

Selecting the Partner  When a firm’s people self selected themselves into the deal, the energy comes from self-motivation is tangible and translates into positive alliance results.  “Self-motivation is critical to success. How did you assess the self-motivation of the partner in your last alliance” Self selection: Intangible factor in partner selection

Selecting the Partner The Multiple Partner Option  Sometimes, there are more choices qualified for alliance framework  Step 2,3 and 4 negotiation can create multiple relationships with many companies.  As the result Batelle’s MicroCats Alliance

Selecting the Partner  Use strategic fit reconciliation map and resource fit reconciliation map to compare result of step 3 and 4 among potential partners  Include motivation assessment as a partner selection area  Loop back to step 2 to reassess your position in light of new information  Select the best partner or moving ahead to step 6  Look back to step 3 and 4 for possible interpartner conflicts before step up to step 6 Tip for completing step 5 in alliance framework Step6 Negotiating an Agreement Step5 Selecting the Partner Step4 Conducting Resource Fit Assessment Step3 Approaching Potential Partners: Strategic Fit Assessment Step2 Achieving internal Consensus Step1 Appointing the Planning and Negotiating team