Creating and Managing Strategic Alliances

Gene Slowinski, Ph.D.

Director, Strategic Alliance ResearchRutgers University

&Alliance Management Group, Inc.

www.strategicalliance.com(908) 234-2344

Creating and ManagingStrategic Alliances

• The strategic use of alliances

• Best practices for building successful alliances

– Alliance Framework – planning and structuring

– Alliance Implementation Program - implementing

The Strategic Use of AlliancesThe Traditional Model

IBMHP/Compaq

The Strategic Use of AlliancesThe Network Model

IBM HP/Compaq

The Strategic Use of AlliancesA Strategic Approach to the Erythropoetin Market:

Chugai Corporation

Genetics Institute

R&D

Chugai

Manufacturing

Pharmacia

Name Recognition Distribution

Competitive PositioningHow Wall Street will value a firm’s portfolio of alliances

BiotechBioinformatics Global Channel

PartnersE-commerce

Merck

Pfizer

Ortho

GlaxoSmithKline

Creating and ManagingStrategic Alliances

• The strategic use of alliances

• Best practices for building successful alliances

– Alliance Framework – planning and structuring

– Alliance Implementation Program - implementing

Alliance FrameworkSM

• A rigorous process for planning and negotiating an alliance.

• Goal is to develop a high quality deal quickly or, to understand that a deal is not possible ... quickly.

• Requires internal commitment from all key internal stakeholders (anyone with a budgetable resource).

• Accelerates implementation because implementers are part of the Alliance Framework team.

• Works best when both firms use the process.

Why Alliances go bad !

Company A Company B

Alliance Framework Elements

• Summary of business plan• Objectives• Roles• Resources • Boundary conditions• Complete market model• Exclusivity• Intersections• Intellectual property• Financial distribution model• Joint management processes• Term and termination

Strategic Fit Elements:

Creating and ManagingStrategic Alliances

• The strategic use of alliances

• Best practices for building successful alliances

– Alliance Framework – planning and structuring

– Alliance Implementation Program – implementing

– Joint negotiators presentation

–Decision making analysis

–Conflict resolution

Business Development Presentation

Team member – Company A

Business Development Presentation

Team member – Company B

Creating and ManagingStrategic Alliances

• The strategic use of alliances

• Best practices for building successful alliances

– Alliance Framework – planning and structuring

– Alliance Implementation Program – implementing

– Joint negotiators presentation

–Decision making analysis

–Conflict resolution

Decision Making Analysis

Copyright © 2003 Alliance Management Group all rights reserved. These materials may not be reproduced or distributed in any manner without the express written permission of the Alliance Management Group.

How are decisions made in your company?

Characteristic Key people Formal process

Informal process

Time to decision

Capital request >50K

Hire/Replace Employees

Project funding

???

Creating and ManagingStrategic Alliances

• The strategic use of alliances

• Best practices for building successful alliances

– Alliance Framework – planning and structuring

– Alliance Implementation Program – implementing

– Joint negotiators presentation

–Decision making analysis

–Conflict resolution

Anatomy of an AllianceThe Early Days

Company A

X Functional team

Company B

X Functional team

Anatomy of an AllianceMature alliance

Company A

X Functional team

Company B

X Functional team

Alliances are a cascade of covenants between people. These covenants are dynamic and complex.

Expectation Mapping Worksheet

Copyright © 2003 Alliance Management Group all rights reserved. These materials may not be reproduced or distributed in any manner without the express written permission of the Alliance Management Group.

With what priority?

Which tasks will be done cooperatively with me?

E

D

C

B

A

What tasks am I expected to perform?

Expectation Mapping Worksheet

Copyright © 2003 Alliance Management Group all rights reserved. These materials may not be reproduced or distributed in any manner without the express written permission of the Alliance Management Group.

With what priority?

Which tasks will be done cooperatively with me?

E

D

C

B

A

What tasks will my counterpart perform?

Thank You !