Module 7 Strategic alliances

Evidence of alliances

• In an effort to establish itself as a force in European and Japanese markets, the Nasdaq formed a joint venture with SSI Technologies of India to develop an internet-based trading and market system to launch Nasdaq Europe and Nasdaq Japan.

• In February 2001, the Coca-cola company and Procter & Gamble announced a $4.2 billion joint venture to use Coca-Cola’s huge distribution system to increase reach and reduce time to market for the P&G products Pringles and Sunny Delight.

Learning objectives

• Understand the potential benefits and risks associated with strategic alliances

• Learn the life cycle of strategic alliances• Review forms of strategic alliances• Learn the monitoring and evaluating

process for strategic alliances• Analyze and deal with problems related to

strategic alliances

Benefits of strategic alliances

• Market

• Resources

• Technology

• Management practices

• New opportunities

• Competitive advantages

Types and forms of alliances

Strategic alliances: any formal arrangement between two or more organizations for purpose of mutual gain.

• Ownership vs control

• Number of members

• Governance structure

• Mandated vs voluntary participation

A life cycle of organization alliances in health care

Stages

Emergence Transition MaturityCritical crossroads

Environmentthreat & uncertainty

Share ideologies& dependencies

Define purposes ofAlliances

Develop membership criteria

Motivation to Achieve alliances

Increase Dependence ActivitiesHire or form Management group

Coordination & control

Put allianceInterest first

Realize Benefits

Attain objectives

Member commitment

IncreasedDependence OrWithdrawal

Future ofalliance

Risks of strategic alliances• Overly optimistic • Poor communication• Lack of shared benefits• Lack of commitment• Lack of a clear boundary• Lack of evaluation system• Slow results or payback• Culture mismatch

Monitor and evaluate strategic alliances

Decide to monitor performance Decide the purpose

Design methodologyCollect dataInterpret data

Report and recommendations Evaluate the process

Analyze and deal with problems

• Locate problems– Environmental problems– Strategy problems– Structure problems– Behavior problems

• Identify the root of the problem– Parochial self-interest– Misunderstanding and a lack of trust– Different assessments– Low tolerance for ambiguity

• Deal with problems– Education– Participation– Facilitation– Negotiation– Cooperation– Coercion

Information about the third case summary

• Average: 7.89

Winner of The Best Quality:

Shaen Ann Stesco

Winners of The Excellent Summary:

Maryellen Gleeson

Mary Choi Jenna Allen