Strategic Alliance

Shanata Saraswati
Wibowo / 1706982102
TABLE OF CONTENTS

01
Nature and motive of
02
Building commitment
creating strategic
alliance

03
Stages of development
04
Putting it all together
Strategic
Alliance
Connection between two or more organizations
that cause them to function according to a
perception of a single interest shared by all the
parties.
An alliance is strategic when the connections that
bind the organizations are enduring and
substantial.
CHARACTERISTIC
Balanced Power
Each side exerts considerable
influence over the other
Commitment
Long time horizon, active
desire to keep the relationship
going, and willingness to
make sacrifices to maintain
and grow the relationship
 Motive Upstream Downstream
Fundamentals Motivating downstream Avoiding stockouts while
channel members keeping costs under
to represent them better control

Generating Coordinating marketing Coordinating marketing

customer efforts more tightly efforts more tightly
preference

Preserving choice Guaranteeing market Assuring a stable supply of

and flexibility of access desirable products,
channel partners

Strategic Erecting barriers to entry Differentiating themselves

preemption to other brands from other downstream
channel members

Superordinate Enduring competitive Enduring competitive

goal advantage leading to advantage leading to profit
profit
Alliance vs Ordinary Channels

Performance Difficult and costly

Trust enhances Strategic alliance
performance takes time and
investment

Differentiation Possibility of failure

Commitment and Mutual commitment
differentiation go in strategic alliance
together is not guaranteed

Outcome
Better strategic and
economic outcomes
through long time
horizon
02. Building Commitment
How to make a successful
strategic alliance
Creating Mutual Management of
Vulnerability Daily Interactions
How much we are willing to Daily events and interactions
commit determine trust
Minimum Requirement
Expectation of
continuity
•Trust
•Communication
•Fair treatment of channel
members and long term
relationships
•Balanced power
•Combined stakes
Importance of Mutual Commitment

Commit to the relationship to earn

commitment, act like it, maintain it.
Judging/ Inferring Commitment

Past Relationship Actions

If we have an ● Protection from

acrimonious past with competitors
our partner, they are less (selectivity)
likely to be committed ● Idiosyncratic
investment
Actions Distributors to Suppliers Suppliers to Distributors

That Distributor enters

relationship believing
Suppliers first verify
downstream member’s
that the payoff will justify ability and motivation
Bind the cost
● Idiosyncratic
● Supplier-specific investment
investments ● Two way
● Exchange of communication
information
Creating Alliance via Ties That Bind

Commitment Communicate
Commit to those Invest in two way
committed to you communication

01 02 03 04

Make Investments Mutual Exposure

Investments If both sides depend
generate value, on each other, they
inspire, and oblige will make the
to keep the alliance
alliance strong
growing
Manufacturing Trust

Economic Pick Appropriate

Satisfaction Partner and Setting
Financial reward ● Familiarity
● Personal relationship
and reputations
● Goal congruence

Noneconomic Pay Attention to

Satisfaction Decision Structure
● Absence of •Centralization
dysfunctiona
l conflict and
•Formalization
coercion •Communication
● Perception
of fairness
Trust comes from daily
interactions and
accumulation of
experience
03. Stages of Development
Implication
Expansion
Time
phase
Strategic Ensure each
alliance takes side perceives
time mutual benefit

Exploration Commitment
Phase Stage
Intangible Maintain the
perceptions, relationship
early interaction
and outcomes
are crucial
 Managing Troubled Relationships

01
Mutual investment
matters 02
Goal congruence
matters 03
Don’t rely on
interpersonal trust
between key person
 Hidden Cost of Trust
Lack of constructive conflict, settling on an agreement too fast,
homogenous, lacking creativity, exploitation
Virtues of a Portfolio of Relationships
It is important to have a mix of relationships, both strategic
alliance and conventional. This is to cover the market and meet
multiple service output demands
04. Putting It All Togehter
In Conclusion
Alliances cannot grow at will, but the conditions that favor it can be
created. Conditions below signify a higher likelihood that the
relationship will hold

One side has

special needs

The other side has

capability to meet
these needs
Each side faces
barriers in exiting
the relationship
Case 1
Krakakoa x Kaktus Cookies
 Case 2
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