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The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge.

The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

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Page 1: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

The Power of Strategic AlliancesUsing strategic alliances to grow your business and gain a competitive edge.

Page 2: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

AGENDA: The Power of Strategic Alliances

• What is a strategic alliance?

• Strategic alliance attributes and dynamics

• Identifying when a strategic alliance can help your business

• Identifying goals from a strategic alliance

• Identifying potential partners

• Screening the potential partner

• Assessing your own readiness to become a strategic partner

• Embarking on the process of forming a strategic alliance

• Negotiating the deal

• Documenting the deal

• Monitoring the progress of the alliance

• Expanding or ending the alliance

• Strategic alliances with employees

Page 3: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

.What is astrategic alliance?

Page 4: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

What is a strategic alliance?An Alliance is a formal relationship between two or more parties to pursue a set of agreed upon goals or to meet a business need while remaining independent organizations.

An Alliance is Strategic when it:

1. Is critical to the success of a core business goal or objective.

2. Is critical to the development or maintenance of a core competency or other source of competitive advantage.

3. Blocks a competitive threat.

4. Creates or maintains strategic choices for the firm.

5. Mitigates a significant risk to the business

Page 5: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

What is the real value of a strategic

alliance?

Page 6: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

What is the real value ofa strategic alliance?

A Strategic Alliance can be a way for businesses and individuals to grow, solve problems, take advantage of opportunities in a cost effective, accelerated fashion.

Page 7: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

What are some specific reasons to form a strategic

alliance?

Page 8: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Reasons to form a strategic alliance• enter new markets• create new technology that will become an industry standard• shape consolidation• gain economies of scale• eliminate excess capacity• harness a partner’s energy and knowledge• learn something• reduce risk• gain global reach• gain speed• enhance product development • develop new business opportunities through new products and services• diversify

Page 9: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

What are some examples of strategic

partners?

Page 10: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Examples of strategic partners1. Employees2. Key Suppliers3. Major Customers4. Banker/investors5. Attorney6. Accountant7. Insurance agent8. IRS and other government agencies9. Competitors10. Special partners (ex. long term relationships with mentors,

trusted “friends,” universities, consultants, organizations such as SCORE, professional and industry organizations)

Page 11: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Could you ever use a Strategic Alliance?

Page 12: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

How can you identify areas of need for an

alliance opportunity?

Page 13: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Initial Assessment Tool: Potential for Strategic Alliance

SWOT ANALYSIS ANALYSIS WORKSHEET

Date: __/__/____

STRENGTHS WEAKNESSES 1. 2. 3. 4. 5.

1. 2. 3. 4. 5.

OPPORTUNITIES 1. 2. 3. 4. 5.

THREATS 1. 2. 3. 4. 5.

Notes: ________________________________________________________________________________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ .

Page 14: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Initial Assessment Tool: Potential for Strategic Alliance

SWOT ANALYSIS ANALYSIS WORKSHEET

Date: __/__/____

STRENGTHS WEAKNESSES Action / Start Date / Completion Date Action / Start Date / Completion Date

1. 2. 3. 4. 5.

1. 2. 3. 4. 5.

OPPORTUNITIES THREATS Action / Start Date / Completion Date Action / Start Date / Completion Date

1. 2. 3. 4. 5.

1. 2. 3. 4. 5.

Notes: ________________________________________________________________________________________________________________________________________________________________________________________________ _______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________ .

Page 15: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Can you use Strategic Alliances?See how you compare with the

competition.

Page 16: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Initial Assessment Tool: Potential for Strategic Alliance

Potential reasons for Strategic Alliance

Rate value to you; 1-5 with 5 being most

Cost to achieve on your own (ex. time, money, other resources)

Greater ROI through alliance? Worth the

effort? (Y/N)

CLASSIC REASONS: enter new markets create new technology shape consolidation gain economies of scale eliminate excess capacity harness a partner’s energy and knowledge

learn something reduce risk gain global reach gain speed enhance product development develop new products or services

diversify UNIQUE REASONS IMPORTANT TO YOU:

This tool gives you examples of common reasons to form a strategic alliance. Rate whether any of these might have the potential to help your business achieve its goals faster or more effectively than trying to achieve them without an alliance. Then plug in any other unique goals for your company to see if these present opportunities for a strategic alliance.

Page 17: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Strategic alliance dynamicsSix common attributes of successful partnerships:

1. Character - the combination of qualities or features that distinguishes one person, group, or thing from another.

Integrity - steadfast adherence to a strict moral or ethical code.Honesty - marked or displaying integrity, upright; not deceptive or fraudulent,

genuine; characterized by trust, not false; sincere, frank

2. Trust - firm reliance on the integrity, ability, or character of a person or thing.

3. Open communications - a process by which information and ideas are exchanged freely between two parties

4. Fairness - having or exhibiting a disposition that is free of favoritism or bias, impartial; just to all parties, equitable

5. Self-interest of both partners - there must be “something in it” of an economic or otherwise beneficial nature for both partners

6. Balance of rewards vs. risks and/or resources required - the partnership cannot be too lopsided

Page 18: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Strategic alliance dynamicsQuestions to ask yourself

• 1. What is the purpose of the partnership/alliance?• 2. What are the benefits to each partner from the alliance?• 3. What is working well in the relationship and what could work

better?• 4. What contributions do you make to the relationship? What

contributions does the partner make?• 5. How are decisions made?• 6. How are disagreements resolved?• 7. What information is shared? How is it shared?• 8. How do you and your partner contribute to the success of the

other party?• 9. On a scale of 1 to 10, with 10 being the highest, how do you

rate the success of the relationship?

Page 19: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Assessing a Potential Strategic AllianceQuestions to ask yourself

• 1. What is the relative value of the partnership or alliance?

• 2. How willing is this potential partner to form an alliance?

• 3. What is the level of trust or the possibility of mutual trust?

• 4. What is the prospect’s track record of character and ethics?

• 5. Does the prospect have comparable aspirations?• 6. Does the prospect have a similar culture?

Page 20: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Assessing a Potential Strategic AllianceQuestions to ask yourself

• 7. Is there a consistent direction for both companies?

• 8. Are goals and interests of both companies fairly equal?

• 9. Can both partners share relevant information liberally?

• 10. Are the risks shared fairly and equally?• 11. Are the potential rewards shared equally and

fairly.• 12. Does the smaller partner have adequate

resources to support the larger?

Page 21: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Assessing a Potential Strategic AllianceQuestions to ask yourself

• 13. Can the partners agree on the duration?• 14. Is top management support present in both

companies?• 15. Is commitment level broad for both partners?• 16. Do partners have substantially similar

perception of the value the other brings to the partnership?

• 17. Do the rules and polices reinforce desired partnership behavior?

Page 22: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Mechanics of Strategic Alliances

Page 23: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Mechanics of Strategic Alliances

Traditional alliance processes include:

1. Strategy and analysis

2. Partner selection and relationship development

3. Alliance management and metrics

Page 24: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Initial Assessment Tool: Potential for Strategic Alliance

The Power of Strategic Alliances

Initial Assessment Tool: Comparative Potential for Strategic Alliance

What can you contribute to a

strategic alliance? >

Value to Prospect 1-5 with

5 being most

Potential reasons for Strategic Alliance

Value to you 1-5 with

5 being most

What can Potential Strategic Alliance Prospect contribute?

< CLASSIC REASONS: enter new markets create new technology shape consolidation gain economies of scale eliminate excess capacity harness a partner’s energy and

knowledge

learn something reduce risk gain global reach gain speed enhance product development develop new products or

services

diversify What else you need from a strategic alliance?

UNIQUE REASONS IMPORTANT TO YOU or PROSPECT:

What else does Prospect need from strategic alliance?

Page 25: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Quick Tips on Monitoring, Expanding, and Ending a Strategic Alliances

• Good drafting• Create a “learning” alliance• Honest flow of information• Quick action• Engaged TQM

Page 26: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Action Plan for Forming AnyStrategic Alliances

Page 27: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

Strategic Alliances with Employees

Page 28: The Power of Strategic Alliances Using strategic alliances to grow your business and gain a competitive edge

REVIEW: The Power of Strategic Alliances

• What is a strategic alliance?

• Strategic alliance attributes and dynamics

• Identifying when a strategic alliance can help your business

• Identifying goals from a strategic alliance

• Identifying potential partners

• Screening the potential partner

• Assessing your own readiness to become a strategic partner

• Embarking on the process of forming a strategic alliance

• Negotiating the deal

• Documenting the deal

• Monitoring the progress of the alliance

• Expanding or ending the alliance

• Strategic alliances with employees