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The Alliance Framework. 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 S trategic P lan

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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 Plan

      • 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 plan of both firms

  • The Alliance Framework: What is it?

    • Alliance Framework Elements

    • Alliance Framework Process



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Fundamental RequirementsofSuccess

  • Linking the Alliance to the Business Strategic Plan

    • Linking the goals and objectives of the alliance to the strategy of both organizations

      • What is the core need of the businesses?

      • Why?: If environment changes, it will affect all the partners in the same direction!

      • E.g. Tire manufacture


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Fundamental RequirementsofSuccess

  • Long-Term Impact of Alliance Formation

Companies lose controloftheirlong-termstrategy due topreviousdecisions

  • Positive Side of Path Dependence: Unanticipated opportunities


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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


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Fundamental RequirementsofSuccess

  • Revealing the Business Strategic Plan Clearly and Honestly to the Other Party

    • Issue: Overexposure

      • 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 plan of both firms



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The Alliance Framework

Elements:

  • Business Plan Summary

  • Objectives

  • Roles

  • Overall Resources

  • 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


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The Alliance Framework

Process:


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