αlpha consulting
inc.Strategic Alliances
Strategic Alliances - a form of Synergy
Organizations are increasingly seeking alliances to become more effective despite having to face the uphill battle of financial pressures. All of these push the managers in the opposite direction of developing the needed capabilities within. It is because 1+1=3 whenever partners continuously get more from a relationship than is put in.
Basic Characteristics
To be successful and sustainable, each of the partners need to have a mutual interest in the other's future. Alliances need to benefit both, create new value from the combined skills and capabilities of each, and have a governance structure that embodies shared values, trust and respect.
Value Dimensions of Strategic Alliances
Alliance value is more than just cash return over a short run. Its' value may also be found in future net improvements in market share, competitive advantage, innovation in products, services and organizational know-how or capacity to thrive on change, as well as improved financial return and profitability.
Some of the value of alliances is illustrated in studies which show that your consumers want an integrated buying experience - not just individual products and services but seamless, flexible and reliable best in breed solutions from a single source. By providing adaptable solutions encompassing products, services and best practices you allow your consumers to focus on their core business rather than the intricacies of piecing together a network of solutions themselves.
How to Avoid Buying into a Swampland
An alliance needs to be backed by a business strategy. Your business strategy dictates what capability you need to acquire as a result of the partnership. Additionally a partnership strategy decides which is the right partner, which is the most appropriate structure, how decisions will be made how risks will be managed and so on. Yet time and time again, organizations enter into alliances without a clear since of their underlying strategy, particularly since only 67% have a documented strategy.
How do I make it Produce
Consider working through the following Process. Critically evaluate the logic and fit of an alliance to meet the needs of your business strategy.
Precisely define what your organization needs to get out of the alliance in dimensions such as market share, competitive advantage, products, services and process innovation knowledge transfer and profitability.
Identify and evaluate a list of possible partners and select a partner 9if one exists) and design of partnership to satisfy your needs.
Develop a document in plain language that defines your common goals, the strategy and timeframe for each partner to archive their goals, the parameters, guiding principles, roles and responsibilities of each as well as a governance framework for decision making, performance measuring and reporting and resolving of all conflicts. Use the plain language document as the base for the future legal agreement.
Evaluate your preparedness and commitment as evidenced by your internal support structure for the alliance
Monitor and measure ongoing to confirm that the strategy and how it is implemented are achieving the intended results documented in item 2
Read our news letter which focuses on Strategic Alliances from a slightly different perspective.
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