1. Imperatives for Market-Driven Strategy

2. Markets and Competitive Space

3. Strategic Market Segmentation

4. Strategic Customer Relationship Management

5. Capabilities for Learning about Customers and Markets

6. Market Targeting and Strategic Positioning

7. Strategic Relationships

8. Innovation and New Product Strategy

9. Strategic Brand Management

10. Value Chain Strategy

11. Pricing Strategy

12. Promotion, Advertising and Sales Promotion

Strategies

13. Sales Force, Internet, and Direct Marketing Strategies

14. Designing Market-Driven Organizations

15. Marketing Strategy Implementation And Control

Strategic Marketing

StrategicRelationships

Chapter 7

McGraw-Hill/Irwin Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

7-3

Strategic relationships at IBMStrategic relationships at IBM

* Collaborative projects across all major parts of Collaborative projects across all major parts of business servicesbusiness services* Funding universities in services scienceFunding universities in services science* Partnership with Sony and Toshiba to produce new Partnership with Sony and Toshiba to produce new

processorprocessor* Computer code shared with Apache open-source Computer code shared with Apache open-source

web-serverweb-server* IBM programmers work on Linux projectsIBM programmers work on Linux projects

* Collaborating with customers and competitors to Collaborating with customers and competitors to invent new technologiesinvent new technologies

* Strategy of openessStrategy of openess

7-4

Strategic relationshipsStrategic relationships

StrategicRelationships

Suppliers

End-UserCustomers Intermediate

Customers

InternalPartners

StrategicAlliances

CompetitorsJointVentures

ExternalPartners

7-5

Strategic RelationshipsStrategic Relationships

* The rationale for interorganizational The rationale for interorganizational relationshipsrelationships

* Forms of organizational relationshipsForms of organizational relationships

* Managing interorganizational Managing interorganizational relationshipsrelationships

* Global relationships among Global relationships among organizationsorganizations

7-6

Rationale forForming Strategic

Relationships

Value-enhancingopportunities

Competitivestrategy

Skills andresourcegaps

Environmentalcomplexity

The rationale for interorganizational relationshipsThe rationale for interorganizational relationships

7-7

The rationale for interorganizational relationships (1)The rationale for interorganizational relationships (1)

* Opportunities to enhance valueOpportunities to enhance value

* Environmental complexityEnvironmental complexity

* Competitive strategyCompetitive strategy

* Skills and resource gapsSkills and resource gaps* Technology constraintsTechnology constraints* Financial constraintsFinancial constraints* Market accessMarket access* Information technologyInformation technology

7-8

Collaborations in open-source softwareCollaborations in open-source software

* IBM and Sun aggressive supporters of IBM and Sun aggressive supporters of Linux open-source softwareLinux open-source software

* Technology sharing and partnershipsTechnology sharing and partnerships

* Rebuilding the technology Rebuilding the technology “ecosystem”“ecosystem”

* Reducing dependence on MicrosoftReducing dependence on Microsoft

7-9

Airline AlliancesAirline Alliances

* Major global alliancesMajor global alliances* OneOneworldworld* SkyteamSkyteam* Star AllianceStar Alliance

* Contain 18 of the world’s largest airlineContain 18 of the world’s largest airline* Account for 60% of total world airline Account for 60% of total world airline

capacitycapacity* But a history of alliance failures and But a history of alliance failures and

desertionsdesertions

7-10

The rationale for interorganizational relationships (2)The rationale for interorganizational relationships (2)

* Evaluating the potential for Evaluating the potential for collaborationcollaboration* What is the strategy?What is the strategy?* The costs of collaborationThe costs of collaboration* Is relationship strategy essential?Is relationship strategy essential?* Are good candidates available?Are good candidates available?* Do relationships fit our culture?Do relationships fit our culture?

7-11

Mapping the Path to Market LeadershipMapping the Path to Market Leadership

Market-OrientedCulture and

Process

SuperiorCustomer

ValueProposition

Positioningwith DistinctiveCompetencies

RelationshipStrategies

OrganizationalChange

7-12

Firm

Supplierrelationships

Customerrelationships

Internalpartnerships

Lateralpartnerships

Forms of organizational relationshipsForms of organizational relationships

7-13

Illustrative interorganizational relationshipsIllustrative interorganizational relationshipsStrategic Alliance

Joint Venture

Supplier/ManufacturerCollaboration

DistributionChannelRelationship

MM

W

R

EU

M

M JV

7-14

Forms of organizational relationships (1)Forms of organizational relationships (1)

* Supplier relationshipsSupplier relationships* Strategic suppliersStrategic suppliers* OutsourcingOutsourcing

* Intermediate customer relationshipsIntermediate customer relationships

* End-user customer relationshipsEnd-user customer relationships

* Strategic customersStrategic customers* Dominant customersDominant customers* Strategic account managementStrategic account management

7-15

Forms of organizational relationships (2)Forms of organizational relationships (2)

* Strategic alliancesStrategic alliances* Alliance successAlliance success* Alliance weaknessesAlliance weaknesses* Types of allianceTypes of alliance* Requirements for alliance successRequirements for alliance success* Alliance vulnerabilitiesAlliance vulnerabilities

* Joint venturesJoint ventures

* Internal partneringInternal partnering

7-16

CostCo Versus Wal-MartCostCo Versus Wal-Mart

* CostCo has achieved major position in U.S. CostCo has achieved major position in U.S. warehouse club business against strong warehouse club business against strong competitorscompetitors

* Success based on customer choice and Success based on customer choice and constant innovation and productivity constant innovation and productivity improvementimprovement

* CostCo compensates employees more CostCo compensates employees more generously than competitors - to motivate generously than competitors - to motivate and retain good workers - they get lower and retain good workers - they get lower staff turnover and higher productivitystaff turnover and higher productivity

7-17

Managing interorganizational relationships (1)Managing interorganizational relationships (1)

* Objective of the relationshipObjective of the relationship* New technologies and competenciesNew technologies and competencies* Developing new markets and building Developing new markets and building

market positionmarket position* Market selectivityMarket selectivity* Restructuring and cost reductionRestructuring and cost reduction

7-18

Managing interorganizational relationships (2)Managing interorganizational relationships (2)

* Relationship managementRelationship management* PlanningPlanning* Trust and self-interestTrust and self-interest* ConflictsConflicts* Leadership structureLeadership structure* FlexibilityFlexibility* Cultural differencesCultural differences* Technology transferTechnology transfer* Learning from partner’s strengthsLearning from partner’s strengths

7-19

Managing interorganizational relationships (3)Managing interorganizational relationships (3)

* Partnering capabilitiesPartnering capabilities

* Control, evaluation and reviewControl, evaluation and review

* Exiting from allianceExiting from alliance* Identify/agree what triggers exitIdentify/agree what triggers exit* Detail rights of each partner to Detail rights of each partner to

assets/productsassets/products* Design disengagement processDesign disengagement process* Communication plan for all involved Communication plan for all involved

partiesparties

7-20

ManagingInter-Organizational

Relationships

Objectiveof theRelationship

RelationshipManagement

PartneringCapabilities

Control andEvaluation

Exiting fromAlliance

Managing Interorganizational relationshipsManaging Interorganizational relationships

7-21

Global relationships among organizationsGlobal relationships among organizations

* The Global Integrated EnterpriseThe Global Integrated Enterprise

* Inter-nation collaborationsInter-nation collaborations

* The strategic role of governmentThe strategic role of government* Government interventionsGovernment interventions* Competing with state-owned enterprisesCompeting with state-owned enterprises* Collaborating with state-owned Collaborating with state-owned

enterprisesenterprises* Government regulationGovernment regulation