-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.OutlineDefining strategic alliances
and networksA comprehensive model of strategic alliances and
networksFormationEvolutionPerformanceDebates and extensionsThe
savvy strategist
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Defining Strategic Alliances
andNetworksStrategic alliances are voluntary agreements between
firms Strategic alliances are compromises between pure market
transactions and mergers and acquisitionsAlliances fall into two
broad categories: contractual (non-equity) and equity-based
Strategic networks are strategic alliances formed by multiple firms
to compete against other networks and singular firms
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.The Variety of Strategic
AlliancesStrategic Alliances
A compromise between short-term, pure market transactions (e.g.,
spot transactions) and long-term, pure organizational solutions
(e.g., mergers and acquisitions)The Variety of Strategic
Alliances
Mergersand Acquisitions(M&A)
MarketTransactionsFigure 7.1
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
A Comprehensive Model of Strategic Alliances and NetworksFigure
7.2
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.A Comprehensive Model of
StrategicAlliances and NetworksIndustry-based considerations
Traditional: Firms are independent playersThe dynamic of five
forces: Horizontal alliances, entry barriers, upstream alliances
with suppliers, downstream vertical alliances with buyers, and
alliances and networks to provide substitute
products/servicesResource-based considerations
The resource-based view is embodied in the VRIO framework, which
are value, rarity, imitability and organizational aspect of
strategic alliance and networks
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Strategic Alliances and
Networks:Advantages and DisadvantagesStrategic alliances and
networks must create valueAdvantages must outweigh
disadvantages
Table 7.1
ADVANTAGESDISADVANTAGESReduce costs, risks, and
uncertaintiesPossibilities of choosing the wrong partnersGain
access to complementary assets and capabilitiesCosts of negotiation
and coordinationOpportunities to learn from partnersPossibilities
of partner opportunismPossibilities to use alliances networks as
real optionsRisks of helping nurture competitors (learning
race)
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.FormationStage one: To cooperate or
not to cooperateStage two: Contract or equity?Stage three:
Positioning the relationship
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
A Three-Stage Decision Model of Strategic Alliance and Network
FormationSource: Adapted from S. Tallman & O. Shenkar, 1994, A
managerial decision model of international cooperative venture
formation (p. 101), Journal of International Business Studies, 25
(1): 91113.Figure 7.3
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Stage Two: Contract or Equity?
DRIVING FORCESEQUITY-BASED ALLIANCES/NETWORKSNON-EQUITY-BASED
ALLIANCES/NETWORKSNature of shared resourcesHighLow(degree of
tacitness and complexity)Importance of direct
organizationalHighLowmonitoring and controlPotential as real
optionsHigh (for possible upgrading to M&As)High (for possible
upgrading to equity-based relationships)Influence of formal
institutionsHigh (when required or encouraged byregulations)High
(when required or encouraged byregulations)
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.EvolutionCombating opportunism
Need to protect against opportunismContractual safeguards and
credible commitmentEvolving from strong ties to weak ties
Strong ties are cultivated over a long period of timeWeak ties
are characterized by infrequent interaction and low intimacyFirms
have a combination of strong ties and weak tiesBenefits of the
different types of ties depend on the firms strategies Many
interfirm relationships evolve from an emphasis on strong ties to a
focus on weak ties
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Evolution (cont.)Going through a divorce
InitiationGoing publicUncouplingAftermathCopyright 2014 Cengage
Learning. All Rights Reserved. May not be scanned, copied or
duplicated, or posted to a publicly accessible website, in whole or
in part.
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.PerformanceThe performance of
strategic alliances and networks
A combination of objective and subjective measures can be used
to determine performanceFour factors may influence the performance
of alliances and networks: equity, learning and experience,
nationality, and relational capabilitiesThe performance of parent
firms
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Alliance- and Network-Related
Performance Measures
ALLIANCE/NETWORK LEVELPARENT FIRM LEVELObjectiveObjective
Financial performance (for example, profitability) Financial
performance (for example, profitability) Product market performance
(for example, market share) Product market performance (for
example, market share) Stability and longevity Stock market
reactionSubjectiveSubjective Level of top management satisfaction
Assessment of goal attainmentTable 7.4
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Debates and ExtensionsMajority JVs as
control mechanisms versus minority JVs as real optionsAlliances
versus acquisitionsAcquiring versus not acquiring alliance
partners
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.Improving the Odds for Alliance
SuccessTable 7.7Source: Based on text in M. W. Peng & O.
Shenkar, 2002, Joint venture dissolution as corporate divorce (pp.
101102), Academy of Management Executive, 16 (2): 92105.
AREASDOS AND DONTSContract versus chemistryNo contract can cover
all elements of the relationship. Relying on a detailed contract
doesnot guarantee a successful relationship and it may indicate a
lack of trust.Warning signsIdentify symptoms of frequent criticism,
defensiveness (always blaming others forproblems), and stonewalling
(withdrawal during a fight).Investment in the relationshipLike
married individuals working hard to invigorate their ties,
alliances require continuousnurturing. Once a party starts to
waver, it is difficult to turn back.Conflict resolution
mechanismsGood married couples also fight. Their secret weapon is
to find mechanisms to avoidunwarranted escalation of conflicts.
Managers need to handle conflicts-inevitable in anyrelationship-in
a credible, responsible, and controlled fashion.
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
-
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.The Savvy StrategistNew generation of
strategists needs to be savvy at both competition and cooperation
co-opetitionImproving relational (collaborative) capabilities is
crucial for successNeed to understand the rules of game governing
networks - both formal and informalCarefully weigh the pros and
cons associated with alliances and acquisitions
Copyright 2014 Cengage Learning. All Rights Reserved. May not be
scanned, copied or duplicated, or posted to a publicly accessible
website, in whole or in part.*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*