Is Your Strategic Alliance Really a Sale?

Presented By:
Arindam Mandal Arjun KP Deepak Sirra Devendra Kumar Sahu
1

Product portfolio Technology Geographic Area Customer Reach Reduce financial & political risk

Emergence of strong entity 7 years of average life 80% End up in sale

oGE & Rolls-Royce oTVS & Suzuki Hero & Honda Lipton & Pepsico Fuji Xerox

Introduction

Why Failure

Risk Assessment

Types

Recommendation

Both are competitors

Both weak companies

Attempt to raise capital

Attempt to access others products & technologies

Risk Assessment Types Recommendation

Introduction

Why Failure

Possession of products, market access, technologies and functional skills Control of the customers Top management positions Ability and willingness to invest

Shift of power to controller of distribution channels and customers Process design capabilities Senior manager in key functions Ability to repeatedly invest overtime Ability to planning

Product and geographic position overlap Ability to bring distinct qualities

Introduction

Why Failure

Risk Assessment

Types

Recommendation

Direct Competitors as partners Product and geographic opportunity conflict Ex: GE & Rolls-Royce

Hoping to improve their positions Both partners lacking resources and flexibility Ends up acquired by third company

Weak and strong competitive partners Weak is acquired by stronger player Clearly defined exit clause Ex: Siemens & Allis-Chalmers

Introduction

Why Failure

Risk Assessment

Types

Recommendation

One Weak company Weak tries to improve capabilities Alliance should support learning Few cases of success Ex: Honda & Rover Strong and compatible partners Develops tension/shift of bargaining power Fair exit provisions-regular review-clear strategic intent Ex: US & Japanese Alliance

Strong and complementary partners Build on each each others capabilities Flexibilty-balanced contribution-clear leadership Ex:Pepsico & Lipton Introduction
Why Failure Risk Assessment

Types

Recommendation

Core competency

No

Yes

No

Yes

Introduction

Why Failure

Risk Assessment

Types

Recommendation

Introduction

Why Failure

Risk Assessment

Types

Recommendation