The features of strategic alliances

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The features of strategic alliances

Contact Us Four Steps to Powerful Strategic Alliances Strategic alliances come complete with their own special set of advantages and challenges. The good news is that there are enormous opportunities for improved outcomes.

Recognizing and adapting to the unique characteristics of each alliance can dramatically increase the likelihood of powerful results for everyone involved.

Can this relationship be saved? Even well conceived alliances can run into unanticipated challenges. Consider the following case: A high-tech company HTC created a strategic alliance with a manufacturing company MC to develop a new product. Both partners considered the potential for success extremely high, as each was considered a market leader in its respective industry.

The management teams of both organizations conducted the necessary due diligence and secured contracts from each other. Everything seemed in place—until the kickoff meeting.

Representatives of the MC, used to working under highly structured project management guidelines, immediately put together detailed steps, a timeline, and measurements for success. On the other hand, the HTC representatives, accustomed to freewheeling interaction and frequently changing directions, resisted this approach to managing workflow and insisted on using their more fluid scheduling system.

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Within six months, changing priorities at both the HTC and the MC made it difficult for alliance team representatives to devote the necessary time and resources to product development efforts. The alliance ended, with each company blaming the other for the poor fit.

Can scenarios like this be avoided?

The features of strategic alliances

The answer is a resounding yes. Here are four steps that can lead to high performance results in many types of alliances, whether they are structured loosely or are developed as highly committed joint ventures. Define and communicate your alliance strategy Many organizations create detailed process guidelines for how to design strategic alliances.

Communicating this information consistently across your organization also ensures that alliances are not inadvertently duplicated in different parts of the company.

Issues to consider include: Do we have the resources and employees with the necessary competencies to properly manage an alliance? Are we willing to be flexible to the regulations and cultures of different countries?

This can provide you with a way to determine how likely it is that the needs of both parties will be in alignment when other priorities threaten to divert time and resources away from the relationship. The clearer your alliance strategy, and the more that all who could be forming alliances understand current needs, risks and benefits, and the degree of fit between your organizations, the more likely it is that your company will choose appropriate partners and that each relationship will get the consistent attention and support it needs to thrive.

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Develop a shared strategy Unlike outsourcing arrangements, which are client-centered, or mergers, where one company tends to dominate, alliance partners are equal in power. Each company is an independent entity with its own objectives and guidelines.

This comes from understanding how the vision, mission, values and strategies of both companies fit together. As executives of the HTC—MC alliance learned, each company is ultimately governed by their own priorities, which can change quickly and dramatically.

This includes expectations from the alliance partners, company roles, sharing intellectual capital, and measurements to determine success.

What are our goals—both individually and jointly? How will we measure success? How will we make critical decisions?

The more that executives from both companies are involved and aligned on these issues, the more likely it is that proper physical and human resources will be allocated to the alliance on a consistent basis, and the faster the alliance can progress toward its objectives.

Executives who try to clone policies and practices and make them fit in every instance are setting themselves up for disaster. Paving the way to high-performance alli-ances requires cultural acumen as well as flexible policies and systems that enable the alliance to stay nimble in response to constantly changing conditions.

Evaluate and adjust As alliances progress, they frequently run the risk of taking on lives of their own and evolving away from their original objectives.

At these times, leaders from both companies need to review the results to date and compare them to the success criteria they established during the joint strategy session. Keep focused on the intent of the alliance, but be prepared to modify your agreement and processes if necessary.

For example, one consumer products company found that its plans to acquire a competitor con-flicted with an agreement they had in place with a key alliance partner who was marketing their products.

The acquisition subsequently had to be called off. Some revealing questions to ask at alliance reviews include:Strategic Consultants Limited Practical Business Solutions. Strategic Consultants Limited is a business consultancy serving clients in Africa, Europe, India and the Middle East.

“Strategic” may be one of the most over-used words in business today. This observation is especially valid in the world of alliances, where managers must distinguish between those alliances that are merely conventional and those that are truly strategic.

Following are safety and health products developed by OSHA's Alliance Program participants to provide information to employers and employees on specific industries or hazards covered by the Alliances.

These products are for informational purposes only and do not necessarily reflect the official. A strategic alliance (also see strategic partnership) is an agreement between two or more parties to pursue a set of agreed upon objectives needed while remaining independent organizations.A strategic alliance will usually fall short of a legal partnership entity, agency, or corporate affiliate relationship.

Typically, two companies form a strategic alliance when each possesses one or more. Alliance Ventures, led by François Dossa, is the strategic venture capital arm of the world’s largest automotive alliance made up of Groupe Renault, Nissan Motor Corporation and .

The features of strategic alliances

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Strategic Alliances: Concept, Features and Forms | Financial Management