1. 0 STRATEGIC ALLIANCES More Value / Fewer Problems IDENTIFYINVESTIGATEIMPLEMENTINTEGRATE “THE PATH TO SUCCESSFUL STRATEGIC ALLIANCES” 4200 Montrose, Suite 590  Houston, TX 77006 (713) 522-9656 Phone  (713) 522-9661 Fax www.wjmurray-assoc.com

2. 1 BENEFITS OF THE W J MURRAY & ASSOCIATES’ PROCESS: Fewer false starts Shorter cycle times Alliances that fit the playbook An organization to accomplish the alliance Successful approaches to search for and value potential partners Proven due diligence techniques Effective integration techniques Pitfalls are avoided LEADING TO: SUCCESSFUL ALLIANCES IDENTIFYINVESTIGATEIMPLEMENTINTEGRATE STRATEGIC ALLIANCES THAT WORK More Value / Fewer Problems

3. 2 Enterprise Strategy *Vision, goals, the path forward Alternatives *Internal development *Alliance *Acquisition How Does An Alliance Fit the Playbook? Costs/Benefits of Alliance Type of Alliance That Match Costs/Benefits *Horizontal: complimentary, competitors *Vertical: supplier/customer *Joint development *Joint venture Initial Screening Criteria *Be clear about the purpose Alliance Process Execution Team (APEX) Partner Selection Criteria *Strategic compatibility *Complimentary objectives *Commitment *Cultural fit *Ability to add value over the long term *Past history Engage the Search Engine Complete Initial Screening Gain Consensus on the Short List Complete Benefits Contributions Matrix Company Contact Shared Business Plan Structure of Alliance APEX Team Game Plan Operating Procedure *Metrics *Make it work provisions Customer, Competitor Regulatory Reactions Risk/Reward Sharing Methodology Manage Employee Concerns Harvest the “Low Hanging Plums” Communication Staffing Linking Budgets/Processes Driving Costs Out of the Systems Managing the Path Forward - The “Scorecard” THE PATH TO SUCCESSFUL STRATEGIC ALLIANCES IDENTIFYINVESTIGATE IMPLEMENTINTEGRATE

4. 3 IDENTIFY WHAT TO DO Confirm the Enterprise Strategy * The Business * The Vision * The Goals * The Competitors * The Value Proposition * The Critical Success Factors Gain Consensus That Partnership Is Better Than Acquisition / Internal Development * Be clear about the purpose of the alliance (functional analysis) Select Alliance Process Execution Team (APEX) Demonstrate How the Partnership Supports the Critical Success Factors Strategic Alliance Versus Joint Venture Expectations * Contributions * Benefits Initial Screening Criteria WHO DOES IT Senior Managers Senior Managers/APEX Team OUTPUTS Enterprise Strategy Internal Commitment Reconfirmation of, and Consensus to Partnership Decision on Strategic Alliance or Joint Venture Expected Benefits /Costs Initial Selection Criteria Alliance Process Execution Team

5. 4 WHY ALLIANCE RATHER THAN INTERNALLY DEVELOP OR ACQUIRE? FAVORS ALLIANCE FAVORS INTERNAL DEVELOPMENT ACQUISITION COST ___ TIME AVAILABLE FOR EXECUTION______________________________________________________ SHORTER LONGER NATURE OF _________ ACTIVITYCOMPLEMENTARYCORE ALLIANCE EXPERIENCE/_____________________________________________________ EXPERTISEHIGHLOW LOW HIGH AMOUNT OF CONTROL______________________________________________________ LOWER HIGHER IDENTIFY

6. 5 SAMPLE INITIAL SCREENING CRITERIA IDENTIFY

7. 6 WHAT TO DO Partner Selection Criteria Engage Search Vehicles * Customer/Supplier * Business Network * Board Members * Law/Accounting Firms * Banks Complete Initial Screen Gain Consensus On Short List Second Phase Screen Based On Partner Selection Criteria Benefits/Contributions Evaluation Discuss with Management Memorandum of Understanding WHO DOES IT Senior Managers/APEX Team APEX Team Senior Managers/APEX Team APEX TEAM APEX Team Senior Managers/APEX Team OUTPUTS Criteria for Ranking Candidates Consensus on Top Candidates Advantages/Disadvantages Associated With Prospective Partner Alliance Costs * Management Time * Dollars, Other Resources Reaffirmation of Purpose /Goals Commitment to Continue INVESTIGATE

8. 7 SAMPLE SECOND-PHASE SCREENING CRITERIA INVESTIGATE

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10. 9 WHAT TO DO Complete Negotiations Discuss Exit Issues Agree on Structure of Alliance * How will the alliance work - define the tasks and business processes Sign Alliance Agreement Align Operating Procedures/ Metrics (Balanced Scorecard ) Address Customer/Competitor/ Supplier and Regulatory Concerns WHO DOES IT Senior Managers/APEX Team Senior Managers APEX Team Senior Managers/APEX Team APEX Team Senior Managers/APEX Team OUTPUT Alliance Agreement Alliance Structure Metrics for Tracking Performance Clarity of Contributions and Benefits IMPLEMENT

11. 10 WHAT TO DO Create Shared Business Plan * Link Budgets / Process to Strategic Alliance Managing “The Path Forward” * Meeting Schedules * Processes Internal Communication * Scope of Alliance * Expectations * How It Will Work External Communication * Customers * Suppliers * Other Potential Partners Staffing * People * Rotation Schedule Building Trust WHO DOES IT Senior Managers/APEX Team APEX Team Senior Managers/APEX Team Senior Managers APEX Team Senior Managers/APEX Team OUTPUT Integrated Alliance * Direction * Commitment * Metrics defined * Budgets * Key issues defined * Roles and responsibilities * RESULTS ACHIEVED INTEGRATE

12. 11 INTEGRATE