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The Alliance Framework

The Alliance Framework. Three Fundamental Requirements of Success. The Alliance Framework. Agenda. The Definition of Success in Alliance Planning and Negotiating Three F undamental R equirements of Success Linking the alliance to the business strategic p lans

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The Alliance Framework

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  1. The Alliance Framework

  2. Three Fundamental Requirements of Success The Alliance Framework Agenda • The Definition of Success in Alliance Planning and Negotiating • Three Fundamental Requirements of Success • Linking the alliance to the business strategic plans • Long-term impact of alliance formation • The “Three Alliances in One” problem • Revealing the business strategic plan clearly and honestly to the other party • Agreeing on alliance intentions, commitments, rights, and limitations that satisfy the strategic plans of both firms • The Alliance Framework: What is it? • Alliance framework elements • Alliance framework process

  3. The Definition of Success in Alliance Planning ang Negotiating

  4. Fundamental RequirementsofSuccess • Linking the Alliance to the Business Strategic Plans • Linking the goals and objectives of the alliance to the strategy of both organizations • What is the core need of the businesses? • If environment changes, it will affect on all the partners in the same direction! • E.g. Tire manufacture

  5. Fundamental RequirementsofSuccess • Long-term impact of alliance formation Companies lose controloftheirlong-termstrategy due topreviousdecisions • Positive side of path dependence: Unanticipated opportunities

  6. Fundamental RequirementsofSuccess The “Three Alliances in One”Problem • The effectiveness of every alliance depends on the ability of both firms to plan and execute all three alliances simultaneously. Company A Company B Marketing Marketing Alliance# 1 Alliance# 2 Alliance# 3 R&D R&D Manufacturing Manufacturing

  7. Fundamental RequirementsofSuccess • Revealing the business strategic plan clearly and honestly to the other party • Agree on an appropriate level of openness • Ability to strike a balance between sharing sensitive information and protecting both firms • Agreeing on alliance intentions, commitments, rights, and limitations that satisfy the strategic plans of both firms

  8. The Alliance Framework: What is it?

  9. The Alliance Framework Elements: • Business Plan Summary • Objectives • Roles • Overall Ressources • Boundaries • Market Model • Strategic Exclusivity • Intersections • Detailed Objectives • Detailed Resources • Financial Pie-Split • locates financial rewards and risks • Intellectual Property • Working Process and Governance • Term and Termination • specify how parties can exit the alliance

  10. The Alliance Framework Process: • Appointingtheplanningandnegotiatingteam • Achievinginternalconsensus • Approaching potential partners: strategic fit assessment • Conductingresource fit assessment • Selectingthepartner • Negotiating an agreement

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