Alliance Constellations

8/9/2019 Alliance Constellations

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Constellation Strategy:

Managing Alliance Groups

Dr. S.Balasubrahmanyam, IIM Kozhikode

PGP-II (SAJVA)

9/18/20141 Dr. S.Balasubrahmanyam, IIM Kozhikode


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Constellations >>>>> Corporations

9/18/2014Dr. S.Balasubrahmanyam, IIM Kozhikode2

Constellation: A set of firms linked through alliances andcompeting in a specific business domain

A Constellation is a group / web / coalition / network of

multilateral alliances with multiple partners competingagainst other such groups and against traditional single

firms [e.g., Airbus, Boeing, Coke, Pepsi, Visa, MasterCard]

Examples of Constellations: R & D Consortia, Joint

Bidding, Code Sharing in Airlines etc.


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Basic Motivations behind Constellations


Linking Markets (e.g., Star Alliance, One World etc)

Combining Skills (e.g., PDA)

Building Momentum (e.g., GM, Ford, Chrysler Web-based

Component exchange Combined Market Power);(Modis + JK + Apollo)Rs.1000 Crore Joint Venture(Technology of Continental)Radial-T

Reducing Costs (Multi-partner JVs Few Japanese Chemical

Firms, Purchasing Cooperatives); Coke-Pepsi-Aspartame;

Sharing Risks (MJVs Oil Companies, Semiconductor Mfrs,Pharmaceutical Companies, Photographic firms etc)


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Design Dimensions Modus Operandi


Group Size No. of Member firms = f(CSFs); Phased

Membership Mix - Combination of Multiple Skills andCapabilities = f(Diversity, B-Spanning, Complementation)

Internal Rivalry Degree to which partners competewith one another = f(Duplication / Exclusion)

Governance Structure = f [(Formal + Informal) Mix] General Assembly (e.g., UN Approach towards nations)

Core and Periphery (e.g., UA and Lufthansa in Star Alliance)

Lead Firm (e.g., GM, Boeing or IBM)


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Alliances in Cable Converters



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Alliances in Interactive TV



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Alliances in Personal Communications



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Alliances in Imaging Applications



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Managing Constellations


Evaluate Design Trade-offs between Group Size,

Membership Mix, Internal Rivalry & Governance Structure

Map your constellation and those of your rivals (Visual Map)

Be clear about benchmarking, trail-blazing and tweaking

Adjust constellation structure to respond to new conditions


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Alliance Success: Top Ten Factors [1-5]



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Alliance Success: Top Ten Factors [6-10]



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Partner Selection:

Balance Capabilities and Goals


Documents

Alliance Constellations