Strategic Alliances: How to Find Your Business a BFF

Presenter Jan Triplett, Ph.D.#AllianceBBOT

CEO, Business Success CenterSales, Marketing & Financial Strategy

Business Success Center, Austin, TX 2011. All rights reserved

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Provide sales, marketing & financial strategy, to growing & under-achieving businesses. Worked with high tech to no-tech product & service businesses Built businesses that last Global Experience Started in 1981. Survived 6 downturns City of Austin Certified Green Business NCRC Certified Technical Advisors National & International Award Winners

Where nature makes natural allies of us all, we can demonstrate that beneficial relations are possible even with those with whom we most deeply disagree, and this must someday be the basis of world peace and world law.


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Have you been part of a strategic alliance?Yes No Results? (Good, Bad, Mixed)

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What was the main goal of your most successful alliance?Grow a career Grow a business

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What kind of alliance are you involved with now or would you like to create?Career Business


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Stores got cheap signs. Coca Cola got promotion.


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All it takes is a Handshake Strategy


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Joint marketing, sales or distribution Keeping competition out Joint production Establishing standards Design collaboration Technology licensing Research and developmentBusiness Success Center, Austin, TX 2011. All rights reserved 9

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A formal or informal agreementBetween two or more individuals or entities To achieve a common goal

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Can take many formsEquity Partnership Private label/OEM Spiderweb Alliance Sales Rep Co-op Marketing Franchise Alliance Joint Venture Merger/Acquisition Keiretsu/Shudan Trading Company

AlliancesBusiness Success Center, Austin, TX 2011. All rights reserved 10

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TemporaryOnce/Trial Periodic Regular

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PermanentPeriod of time Forever

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InformalHandshake Verbal

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FormalSigned mutual agreement of understanding Legal contract


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Vertical between a vendor & a customer, competitors, two or more businesses Horizontal between employees, supervisors, managers, departments Local or global; internal or externalBetter when allies have complementary strengths & limited weaknesses.

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Simplest form of alliance Link operations (Cross training, R&D, etc.) Collaborative, strategic orientation Coordinate mgmt Each remains independent Vested interest in each others future

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A legal contract that joins two or more entities together Creates a new entity Staffing by separate mgmt team All parties agree to share in the profits and losses

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Strategic Alliances

Joint VenturesBusiness Success Center, Austin, TX 2011. All rights reserved 13

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Businesses use alliances for:Productionx Achieve advantages of scale, scope & speed x Enhance product development x Diversify

Marketingx Increase market penetration x Expand market development x Keep competitors out

Salesx Enhance competitiveness in domestic &/or global markets x Develop new business opportunities through new products & services x Increase exports

Financex Create new businesses x Reduce costs

Why do you want an alliance?Business Success Center, Austin, TX 2011. All rights reserved 14

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Individuals use alliances forPromotion & growth Career moves Connections (sales, networks, etc.)


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Friend/Life Saver Network Addition for job/career advancement, accomplishing joint mission Cross Marketing Ally Cooperative Advertising Shared Manufacturing Expense Joint VentureWhats yours?


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Alone we can do so little; together we can do so much. Walking with a friend in the dark is better than walking alone in the light.


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Companies report 18% of revenue is from their alliances.

Increase profits Need for or leverage resources Downsizing Production costs & R&D World class status goals

Meet Threats Regulations & taxes Increased competition Hostile takeover

Take Advantage of Opportunities Need to operate globally Technology changes new, hybrids, commercialization Fast changing marketplace Industry convergence Minimize risk/share riskBusiness Success Center, Austin, TX 2011. All rights reserved

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Cooperative competition Learning component Skill building Cost reduction Risk reduction

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Limits to cooperation Conflict/disharmony (can be ok) End up weaker than ally

Good

Not as GoodBusiness Success Center, Austin, TX 2011. All rights reserved

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SalesLocate near each otherx Food court, Marine repair (Keema, TX), Japans business streets x IBIZ Districts, Enterprise Zones,

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OperationsJoint negotiations for supplies Shared staff Shared resources

Joint marketing effortsx Coupon book for restaurants x Shared ad

Cross promotion, joint events/activitiesx Health fairs, trade shows, hiring fairs x Workshops*Term adopted by Brandenburger & Nalebuff originally from Ray Noorda, founder of Novell Networking SoftwareBusiness Success Center, Austin, TX 2011. All rights reserved 20

Plan it, work it, stay on top of it lanBuilds trust Understandable goals Measurable objectives Verifiable Controllable Diagnosable/Fixable Predictable Replicable Trainable ValuableBusiness Success Center, Austin, TX 2011. All rights reserved 21

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Thousands of alliances formed each year 15% annual growth 60% fail 1/3 report alliances are a struggle 9% build successful alliances

Top successful alliances added $72 Billion in shareholder value over 2 yrs.; bad alliances cost companies $43 Billion. (Harvard/Accenture study 2003)


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Big AlliancesGot Milk? Campaign`

Smaller AlliancesSecurity Company & Wholesaler BSC and PRE Mgmt

Corning & Samsung (glass TV tube/Korea market) Airbus (Britain, Spain, Germany, France)

Bundled contracts

Your examples? What alliances youve tried? Results?Business Success Center, Austin, TX 2011. All rights reserved

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Networking First job, RISE Austin 2011 with 23 firms simultaneously, Community activist, author of Networkers Guide to Success Cooperative competition Austin Technology Incubator (contract), Attorney (speaking), Thinking Big, Staying Small (co-author) Sales Rep Virtual Marketing Director Co-op marketing for clients and with clients Acquisition Entrepreneurs Association Trading Company 2 international trade missions, Japanese colleague

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On the ground of intersecting highways, join hands with your allies. BUT We cannot enter into alliances until we are acquainted with the designs of our neighbors.- from The Art of War


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Leverage Strengths Minimize Weaknesses


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To be successful:Set reasonable, realistic goals Choose the right kind of alliance Know the rules Select the right allies Work the alliance Measure results Have a way out (transfer, transform, exit) & a contingency plan


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Your strategic alliance process Getting through the differences Not giving away too much Training everyone Sharing power

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Keeping it going Communication both ways Getting out of a bad/ unproductive alliance Ultimate outcome Legally speaking

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Two possibilitiesChoosing allies Being chosen to be an ally

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Same issuesChoose allies that match your profile Do your due diligence (whats their alliance history) Set rules of engagement Communicate often Measure results (including Early Warning System)


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Demographics Psychographics Vision Behaviors Risk Tolerance Decision-Making Style Management Style Game Food Choices


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Your strengths & weaknesses Are you willing to let your potential allies know these? Who are you?Believer, Rebel, Competitor DIAYDo It All Yourself, Worker Bee, Investor/Inventor Big gridder, little gridder Decision style Management style Entrepreneur, Proprietor, Guild Game Food PreferencesBusiness Success Center, Austin, TX 2011. All rights reserved 31

Every step is necessary1.

Set goal, ID potential ally/allies Complete due diligence to assess fitness of ally Negotiate alliance Transfer alliance to mgr Launch and train all alliance staff Manage Audit (Early Warning System & Metrics) Transform/Transfer/ExitBusiness Success Center, Austin, TX 2011. All rights reserved

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Goals who wants what Responsibilities who does what Rules how its done (including culture business & personal attitudes & exit strategy)

What you & they willing to do or not do.Business Success Center, Austin, TX 2011 All rights reserved


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Authority Marketing Sales Finance Assets Personnel

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Whos in charge? Who decides? How its done? Who pays & where it stays? Who owns what? Who works & how long?


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Initial Short Term Long Term Need Warning Signal System Contingency Plan

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Between 30-60% of alliances fail.Timing Bad Too weak a partner Priorities not shared Roles & responsibilities unclear


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If we are together, nothing is impossible. If we are divided all will fail.


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Technology leaks, stealing Providing vital info on future plans Customers switch to competitor Delays in decision making Asset sales below market value Fake alliance Alliance float ally fails to deliverBusiness Success Center, Austin, TX 2011. All rights reserved

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Priorities misplaced Me first, You last Lack of trust Missed deadlines Roles confused Team conflicts Win-lose position of ally Cost overruns Missed goals and milestonesWhy you need a contingency plan.Business Success Center, Austin, TX 2011. All rights reserved

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Blue Ocean Strategy by Kim & Mauborgne Handshake Strategy by Triplett (ebook Spring 2012) Checklist Manifesto by Gawande Long Tail by Anderson Mastering Alliance Strategy by Bamford Networkers Guide 4th Edition by Triplett (ebook Spring 2012)40


Jan [email protected] Jan Triplett

Blog: http://www.ownersview.com 512-933-1983


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Documents

Strategic Alliances: How to Find Your Business a BFF