Strategic alliances

1 © Tech Mahindra Limited 2011

Strategic Alliances: Vehicle for Increasing

Reach for Growth An Analysis of Strategic Alliances and Their Role in Growth

This document is intended to study Strategic Alliances and Partnerships in

industry that are often used to achieve faster growth and increased market share

by offering synergy and often form groups to compete with leading industry

consortiums.


TABLE OF CONTENTS

1. ABOUT THE AUTHOR 3

2.

EXECUTIVE SUMMARY

4

3.

INTRODUCTION TO ALLIANCES

6

4.

CONVENTIONAL APPROACH TO STRATEGIC ALLIANCES

8

5.

KEY DRIVERS FOR FORGING STRATEGIC ALLIANCES

9

6.

CHARACTERISTICS OF ALLIANCES

13

7.

ALLIANCE PARTNER STRATEGY

16

8.

CRITICAL SUCCESS FACTORS FOR ALLIANCES

20

9.

THE ANALYSIS

21

10.

REFERENCES

22


ABOUT THE AUTHOR

PRITAM SHRIKANT PARVATKAR

Pritam Shrikant Parvatkar is currently Director of Global Alliances and Partnerships at Tech

Mahindra Limited, India’s leading IT and Telecommunication Services Company. He has over 18

year experience, of which 14 years in Telecommunication and Information Technology

Businesses and 4 years in Mechanical Engineering in the domain of Special Purpose Machine

Manufacturing.

Prior to this role, Pritam worked in various leadership roles at Cable and Wireless, the leading

Global Telecommunications company and second largest UK fix and broadband network

player. He established their wholesale business and was responsible for driving the wholesale

and carrier services business, bringing in transformation to business with sustainable

growth and was part of high performance turn around team.

He has been associated with reputed companies like the Tata group in Tata Teleservices

limited as head of business development of wholesale and carrier business, with data access

limited to lead sales and product development and sales of international long distance

operations and selling of internet access services for business class and dial up markets

and Primenet Global Limited to drive the business class internet access services business.

He is a Bachelor of Eng ineer in Computer Sc ience f rom V ishwak arm a Ins t i tu te of

Technology, University of Pune with Distributed Systems and Parallel Processing as major.

He completed his Leadership and Management studied from Indian Institute of Management,

Calcutta and is developing his executive leadership skills to understand managing and driving

companies for strategic business growth.

EXECUTIVE SUMMARY

Collaboration in Business is no more than just a partnership of two companies to form an

alliance like a joint venture or marketing accords. In the Information Technology industry,

collaboration is perceived differently. The alliance partnerships are today collaboration of

multiple companies to provide customer with end to end experience where group of companies

come together for a common purpose. As a result, new form of competition is increasingly

spreading across global markets – in the form of System Integrators backed by Group of

Technology and Industry specific product companies. The individual companies in any group

may have different size, focus, offering. They may be strong in different markets. But they

have specific roles within a group and these companies may associate with each other through

various ways such as loose collaboration to strategic partnerships. This association may be

formal arrangements through legal framework, association through agreements or joint

initiatives to develop specific product and services to address niche markets.

Legendary Japanese Swordsman Miyamoto Musashi said, “In strategy it is important to see

distant things as if they were close and to take a distanced view of close things”


An Alliance Partnership is a formal relationship between two or more organizations to

pursue a set of agreed upon goals or to meet a critical business need while remaining

independent organizations. The purpose may be varied such as learning from partners and

developing competences that may be more widely exploited elsewhere or enable business

to gain competitive advantage through access to a partner's resources, including markets,

technologies, capital and people. Some may be with purpose of providing speed and flexibility

in delivering new products.

This applies well in forming group of alliance partnerships to convert them to be strategic and

provide offering that not only meet short term goals but provide a solid foundation for the long

term goals. Partnership and collaboration are the secrets to any success. Choice of the right

partners and managing a collaborative environment successfully is becoming more and more

important and is shaping core strategy in a dynamic business environment. In that respect,

many companies are forging close relationships with some of the most important technology

vendors and service providers. This ensures that group of companies form a network to

provide clients with unprecedented access to the highest technological and support skills within

these organizations when they need it. This also ensures that participants in such network

groups improve the development of the technology itself, helping to keep it closely coupled with

the real-world business issues that are in demand in market.

With this in agenda, we would analyze ways of forming such groups that can be strategic

alliances and drive sustainable growth in Information Technology business. This paper studies

the various characteristics and compelling propositions of such alliances and strategy adaption

of various partners to drive growth in business. How the technology companies and services

companies partner for formidable options to customers and compete on sustained business value

propositions.

INTRODUCTION TO ALLIANCES

How did the idea of alliances begin? What made organizations to look beyond own

organization to work with other organizations?

The answers to these questions are not simple. Different theories have been debated and

studied. But most prominent of all is the impact and influence of global economy. In early

1960’s, most of American large corporations were unchallenged for their technology,

leadership, skills of marketing and ability to manage businesses with complex and large scale.

However, this saw significant shift as mid 1980’s the revolution spread globally and many

companies outside America started matching or nearly matched American corporations. This

was paradigm shift in newer technology driven computers market to skill based matured

industries like Automobiles, where new entrants adapted more readily to changing requirements

in the markets.

This led to formation of relationships across different markets and domain that eventually shaped

in to Alliances and partnerships. Alliances can be described in many ways based on how two or

more companies decide to work together. It can be cross referrals, Outsourcing to 3rd

p a r t i e s

co-marketing, online af f i l ia te arrangements, business partnership arrangements, jo int venture

companies, legal partnerships or strategic alignment. These can have different drivers for

different organizations.


A strategic alliance is a voluntary, formal arrangement between two or more parties to pool

resources to achieve a common set of objectives that meet critical needs while remaining

independent entities. Strategic alliances involve exchange, sharing, or co- development of

products, services, procedures, and processes. To these ends, strategic alliances can in fact ,

f requent ly do call on cont r ibut ions of o rgan i za t ion -specific resources and capabilities

(that may involve trade-offs in capital, control, and time). The generic motive, to a greater extent

than in the 1990s, is to sustain long-term competitive advantage in a fast-changing world, for

example, by reducing costs through economies of scale or more knowledge, boosting research

and development efforts, increasing access to new technology, entering new markets,

breathing life into slowing or stagnant markets, reducing cycle times, improving quality, or

inhibiting competitors.

Another favoring factor for formation of alliance groups is increasing complexity of products

and services, and their design, production and delivery. It is difficult to find product today that

contain components wholly and distinctly incorporating wholly owned and specialized

techno log ies . It i s ra re serv ice today where per formance is no t dependent on

specialization of various combinations of skills. And it is rate business today that does not rely for

its raw material, marketing or distribution on people with diverse background, technical and

market specific skills. Mitigating all above challenges under one roof is not only difficult but also

undesirable. Because the greatest advantage of scale and specialization is often realization at

the component level than system level.

To address these changes in the competitive environment, companies have created network

of alliances that collaborate to succeed together and gain competitive advantage. Criteria for Business

Partnerships are many. Based on these two or more companies may agree to steps and role

for forging alliance. Usually it starts with due diligence of each partner including SWOT analysis,

cost benefit analysis and evaluation of these partnership drivers against virtual scenario of

not partnering and effect of these on speed, focus and make verses buy situations.

Usually most of partnerships are led by situations where two or more organizations are in need

of one or more of below mentioned strategic approaches to deliver own business plan with

minimum risks and maximized rewards. Some of them are -

• Each side brings something to the table the other doesn't have

• Each made strategic decision not to spend the time or money to do it alone, or can’t do it

alone

• Together, partners are better equipped to meet a market opportunity

• Partnering with one or more other companies can help evolve unique selling proposition or

differentiating market positioning that cannot be easily (or at least quickly) matched by

competition

• Alliance network can help gain critical mass for success, spread cost over large volumes and

achieve economies of scale

• Faster time to market where new technologies combined together offer solutions that

have demand


CONVENTIONAL APPROACH TO STRATEGIC ALLIANCES

The usual steps to forming a strategic alliance, each the subject of learned texts are:

• Locate and validate the alliance within the long-term vision, mission, and strategy of the

organization for short term and long term

• Specify the objectives and scope of the alliance regarding the organization- specific

resources and capabilities that are desired, and underscore the importance of these.

• Question what to offer and what to receive in exchange to highlight interdependence.

(Alternatively, what must be retained internally for strategic purposes, what cannot be done

internally, and what could be done externally)

• Evaluate and select potential partners based on the level of synergy and the ability of the

organizations to work together.

• Identify and mutually recognize the opportunities, including the transparency and receptivity of

information they call for.

• Evaluate negotiation capabilities.

• Understand joint task requirements and develop and propose a working interface with the

prospective partner. (This might necessitate an evaluation of the impact on shareholders and

stakeholders.)

• Negotiate and implement an agreement, anticipating longevity that defines progress and

includes systems to monitor and evaluate performance (while eschewing performance

myopia).

• Define the governance system that will oversee the alliance, enforce its administration, build

trust and reciprocity, and curtail opportunistic behavior.

• Plan the integration and its points of contacts.

• Create the alliance and catalyze it with leadership commitment.

• Manage for value identification, creation, storage, sharing, and usage over time, while

assessing the alliance’s interdependence with other relationships

KEY DRIVERS FOR FORGING STRATEGIC ALLIANCES

These days, strategic alliance is a usual strategy in many businesses. Two or more

enterprises choose to cooperate to achieve their mutually beneficial objectives via partnership

approach. Strategic Alliances are formed out of the desire of enterprises to achieve their

independent business objectives cooperatively. But, in the true fact of today’s globalizes and

complex market place, in order to gain competitive advantage, it is the need to make such a

business arrangements among the fierce competitors in the market place.

Usually these set of benefits are varied in nature. The drivers for such benefits depend upon

the market, products, nature of business and many more dependencies. Some of them are

common to most of businesses that are elaborated here.


Capability Enhancement

Capabilities are gaining critical importance as key differentiator for selecting vendors. In such

times, an enterprise may want to produce something with enhanced capabilities or acquire

certain resources that have limitation or scarcity of the knowledge, technology and expertise. It

may need to seek those capabilities that the other firms have. Strategic Alliance with such

organizations is the opportunity for the enterprise to achieve its objectives in this aspect.

Improved Market Access and Reach

Launching new products in the existing markets or even introducing the existing products in a

new market can not only be costly but can be extremely difficult and sometimes complicated.

It may expose some challenges such as entrench competition, complicated and unmanageable

government regulations and operational difficulties. The opportunity cost and proportionate risks

of direct or indirect losses due to incorrect or incomplete assessment of the market situations

may be risk in addressing such market access aspirations. Choosing a strategic alliance as the

entry mode can not only help overcome some of those problems but as well reduces the

cost of entry and other barriers for increasing reach.

Shared Risk and Rewards

Venturing in any new activity independently may give you access to secure 100% rewards in

case of success. At the same time it poses threat of exposure to 100% risks and hence makes

business non lucrative many a times. In such events, sharing rewards with partners as well

de-risk t h r e a t s t o s i m i l a r p r o p o r t i o n . Enterprises c a n r e d u c e t h e i r i n d i v i d u a l

enterprise’s financial risk by strategic alignment with other companies. It is often difficult decision

but distribution of risk and reward is often safer bet in many circumstances when certainty of

business is challenge or markets are competitive. Unless the companies are not entering

markets with innovation that is usually not accessible to competition and has strong demand, they

always have risks that cannot be under estimated. A strategic partner can help reduce and share

such underlying risks. In turn the rewards shared with partner are worth to de-risk challenges.

Many a times it is observed that shared risks and rewards do not impact negatively on rewards

as collective strength of partners enhance the scale and volumes that often compensate for

shared pie of rewards.

Dealing with Political Challenges

Every market has a governing regulation driven by local administration and political

regime. Bringing your products into such new markets might confront the enterprise with

political factors and strict regulations imposed by the local administration and governance.

Some markets will be liberal while some will be politically restrictive. Some are highly concerned

about the influence of foreign firms on their economics that they require foreign enterprises

to engage in the joint venture with local firms. In this circumstance, strategic alliance work

as enabler to address such newer markets without objections from local political or administrative

regimes.


Achieving Synergy and Competitive Advantage

Increased success rates are often driven by synergy and competitive advantages that provide

edge over competition. Often businesses may not be strong or large enough to attain such

elements on own. Sometimes, forming a strategic alliance or partnership may provide such

leverage for gaining competitive advantage by leveraging on joint efforts with another company.

The combined strengths of such partners may out pass individual strengths by multiple times

and enable all partners to compete more effectively and succeed together. The synergy may

help drive faster success and fundamental advantage that competition may take time to evolve

on standalone basis. The value created by such synergy may be unique proposition that is

compelling to customers and difficult for competition.

Time to Success

Usually organic growth starts fairly well with nice success curve but quickly attains critical

mass from where success in organic manner may be difficult. The growth percentage may

lower and sometimes not sustain. The corporations then have to indulge in to risky propositions

to achieve incremental growth such as take out hefty loans and exercise risky propositions.

Bigger debts and longer return on investment proportion may increase risk in business.

Strategic partnerships forged to address such inorganic growth opportunity provide sustainable

growth without loading with such debts and risks making faster return on investment and

improved viability of business case. Reduce time to success may provide assured positive

upside due to early mover advantage. Time to success is importantly becoming critical

success factor in markets that are not fundamentally controlled by capitalism but often driven

by demand supply gap in favor of demand. As more players invest and enter such markets,

the demand supply gap narrows down and forces all players in to increased competition

making market not only unattractive but increases risk for failure.

Focus

Every large and growing business has limitation of resources due to consumption of developed

resources to be used for success. Further just because you can do something mean you doing it

is always most profitable. Many a times, profitability can increase many folds by doing it through

innovative or different means than on own. The percentage of doing it right and how many

things one business can always do right is always a matter of imposing risk to existing

successful business while driving business growth. Even large corporations are outsourcing

very specialized and core functions rather than doing all on own. Unless you have intellectual

property that is core of success of your business and need extreme protection for sustaining in

the business, it is always a matter of choice in using your resources for what is most critical for

success of your business rather than doing it all on own. It is important to focus on few,

important and critical business drivers to be delivered through own resources and focusing on

them rather than forcing your resources to do what you can get done in cheaper and better way.

Even small businesses can adapt to this strategy to ensure they focus on what they believe

is core to success of business and do not increase risks and liabilities by enduring in to

what they can adapt from third parties. Partnering with players who can fill in these pockets of

your business can provide more secured approach to business.


DIY (Do It Yourself) Verses Buy Situations

In strategic alliances and partnerships, you do not really go shopping. But indirectly you are

buying what you need to consume from a preferred supplier who has special treatment

for you due to partnership approach and commitment you produce in relationship. Since

partner is aware some part of your consumption will be coming from them and not made in

house by you on your own, they may provide you significant benefits that surpass the savings

that you may bring to the table by doing it on your own. Many a times, fierce pressure from

multiple factors from regulations to employee unions may impose such compelling requirements

to DIY (Do It Yourself), but then it will hold your business back, and it holds all the rest of

your employees back. Aligning your business to st rateg ic partnership may provide

solut ion to such s i tuat ion . Another important factor always is what e conomies of scale

you can deliver for your business in DIY compared to getting partner who can provide such

largesse benefits. Does DIY has drivers of creating Intellectual Property that has contribution

to incremental yield on investments and participation in differentiating your positioning? If

answer is yes, then DIY may work. If answer to the question is ― No or ― Uncertain, buy may be

a better option. It is always matter of debate on this approach but often relevance of

situation is important deciding factor for such situations.

CHARACTERISTICS OF ALLIANCES

To be successful, alliance group needs to be focused on a well-defined strategic purpose

and clear roles of all the members. Alliance partners are collection of separate companies linked

through collaborative arrangements. But it is not necessary that all components in one

organization have such collaboration with all components in other organization. Constellation of

alliances can vary by size, pattern of growth, composition, internal competition, and governance

structure. What is appropriate for one may not be completely suitable for another. Hence it is

important to understand these characteristics of alliances that define and govern such

partnerships.

Size

Alliances are created out of need for creating larger consortium that can benefit from

economies of scale or larger market share. When the markets turn competitive with number

of players or groups winning some or other business, then the size factor has significant

impact. When the competition amongst networks centers on the establishment of an industry

standard, the number of companies in the network and their combined share of the total market

share are critical to success. In good old days, Mips emerged as challenger to established

giants in computing market. Eventually Mips was taken over by another large corporation but

it created alliance model that gave run for money to established players and made them

change business model from solo operating product companies to alliance driven solutions

companies. While some of them engaged many technology companies and Mips engaged

fewer larger companies, what made the difference was who commanded what market share

to define future standards.

When the dissimilar partners exploit economies of scale in own industries, a greater volume

of joint business can help the alliance group in its common purpose.


Pattern of Growth

Most of alliance networks do not come to operational model in fully formed model. They are

built brick by brick, into pieces. Both rate of growth and sequence of joining members in an

alliance network often defines role of each player in such alliance group as well affects

network’s competitive success. To attract newer members to align with partner ecosystem, the

potential for joint benefits must be well visible and articulated well enough to demonstrate how

partnership will result in success for every member.

Some companies in such partnerships will see early benefits and some will see it in time to

come, but what is required is defined pattern in which joint propositions are growing. Often ally

of an ally join up hands to build partnership and create formidable option, but then clear

pattern of growth is missing because they are not purpose driven long term partners.

Composition

For convergence industries, more than size of network and number of partners, often the

composition of each partner and alliance is critical to success. Composition ensuring that all

technologies and all markets crucial to product are covered holds key to success. Combination

of technologies and presence in different markets bring new opportunities that eventually

become business wins.

Sometimes partners with even matching skills can find different type of composition to work

i n favor fo r t hem. For examp le i n au t omob i le manufac tur ing i ndus t r y , two

competing companies collaborate to bring in excellence in supply chain management and even

engine technology. Different competing brands may use same engine but composition of

offering may differ.

Even small businesses can adapt to this strategy to ensure they focus on what they believe

is core to success of business and do not increase risks and liabilities by enduring in to

what they can adapt from third parties.

Internal Competition in Alliance Partners

This is more common in system integration businesses. The level of competition will depend

both on how many similar functions are offered by partners and what is structure of relationship

with each other is defined. Such competition has two opposing effects on performance. To

certain point, i t increases f lexibility, dr ive innovat ion and ensure security of supply.

But it can fragment part of business so much that none of partner can reach to economies of

scales and make enough margins to sustain business and hence partnership. Too much

competition amongst partners may finally kill the partnership but reasonable competition can

work without larger impact.

Governance Structure

Cooperation between companies is never automatic. The partnership must provide incentives

f o r p e r f o r m a n c e . Without s o m e c o l l e c t i v e g o v e r n a n c e , t h e s e a l l i a n c e

partnerships can turn to be simply haphazard collection of alliances.


One of most important characteristic of this governance is how good it keeps collective

benefits going on. Many formal consortia’s have governing bodies composed of multiple

members of alliance partner companies but no individual member has a control. These

alliance networks may function without joint management. In such cases, one company need

to have clear lead and others are participants creating larger group. In such case lead

company need to provide management to these multiple partnerships and execute role of

integrator of different systems and services offered by members.

ALLIANCE PARTNER STRATEGY

While having alliance partners benefit but as articulated in previous section, it is purpose defined

and aligned for succeeding together is what matters most. Putting in place a partner strategy

requires thinking at different levels strategically, tactically and operationally. A good partner

strategy requires the buy in from the entire company, at least from its leaders - top executives,

sales managers, professional services managers. The haphazard collection of alliances may not

work over the period of time and may lead to lack of vision. The role of strategy in alliance is to

build it piece by piece and gain some early benefits but as well ensure long term organizational

goal is to core of this alliance partnership. Some of models are prevalent and one of most

accepted model is level based approach to define strategic approach towards building alliance

ecosystems.

Strategic Level

A coherent alliance strategy needs to rely on the underlying business strategy. Before

qualifying the alliance as strategic in nature, some of important aspects need to be well

defined.

• Is the creation of (separate) alliances actually fits my business and sales strategy in the

mid/long term

• Shouldn’t we increase our sales forces instead

• Wouldn’t it create too much conflict with the professional services and sales teams

• Do we want to sell our licenses though resellers or do we simply want a co-sale, co

implementation approach or a mix of both?

• Is the company ready to put in place an internal infrastructure that supports and strives

to maximize the value of external collaboration.

It is important to answer these questions and define whether that partnership is strategic or not.

If the partnership is strategic, it can be supported by hiring a partner manager that coordinates

activities. It will be required to designate individuals within each team that will allocate time on

partnerships, decide % of additional revenues generated by partners and what markets are

covered, what new markets can be added and does organization believe importance of

executive sponsorship and investment of management time to drive relationship to success

with long term commitment.

Tactical Level

Many a times, the partnerships may be need of hour and charter is to achieve define goal

for predetermined timeframe. In such cases, the alliance cannot be strategic partnership. It


will be more opportunity driven. These will not last for long and cannot fit to tactical level of

partnership. The partner managers will move the strategic plan forward based on

performance of such partnerships from time to time. This partner manager will coordinate the

activities of the internal teams with the partners and put together partner processes with direct

accountability of success of partnership. Sales teams will agree on opportunity specific

arrangements derived from the strategic plan, few issues that need to be answered here are –

What is sales engagement model

Who will have direct accountability of success

Who will take the sales lead when partners are being involved in sales processes when

they bring new opportunities

Are clear engagement models critical for successful partnership defined

with the partner manager

What will be role of Product organization and how they will be enabled for demos,

solution centers etc.

What is Marketing plan with such partners

How Legal framework will work

Are we willing to allocate individuals within the teams who can support the partner

process

How to define the coordination processes between the partner manager and the teams

Operational Level

Once you sign the alliance partnership and define tactical engagement model, it is

important to have operational plan in place. Every alliance is build based on set of

expectations and agreed deliverables. It is important to operationalize these alliance

partnerships to deliver this mutually agreed deliverables. With your strategic plan and the

designated persons, you can now operationalize the partnership.

• Re-precise your targets and Identify the markets/countries you want to reach with assigned

Sales targets for every region

• Identify the engagement models you want to follow for each market/country - Evaluate

what partnership models will best help you meet your strategic plan. Try to establish a model

that fits for all but eventually we may need to draft different types of partner types

• Develop a partner selection strategy by setting clear partner evaluation rules


• Delivery roles and responsibility definition for addressing customer need

• Agreed contact and escalation matrix for mobilizing the working of partnership

independent of people relationship.

• Trainings and capability building to adequately service the customer needs from time to time

• Joint initiatives and proposition development to augment market offering

Before approaching your targeted partners, it is important to have prepared. A value

proposition for each type of partner which defines what we offer them in terms of

marketing, sales and complementary services need to be clearly defined.

The value proposition which will come with partnership sales presentation must clearly

present the value proposition that attracts and persuades potential partners. You need to be

sure to outline benefits and activities tailored for each potential partner.

The Partner Cluster includes a broad collection of product companies, service suppliers, and

outsourcing vendors who work as virtual members of the partnership in providing components

of services. The degree to which an organization uses partner services varies widely from

business to business depending on the size, location, industry type, and the strategic goals of

the business.

The management of the partner relationship within the company depends on the kind of partner

and what services are being provided; so for simplicity, the internal "relationship manager" will

be referred to as the partner account manager.

Service level agreements (SLAs) are an integral component in the management of high- quality

services obtained through vendors, suppliers, outsourcers, or any other type of third-party

provider. The partner account manager is responsible for defining the terms of these

agreements, costs, and ongoing operational details involved in getting both the partner provider

and the customer recipient to meet their commitments to the agreement.

Rules of Engagement:

• Confidentiality, • Contracts, • Services engagements, • Escalation, • Sales support, etc


Key factors for Alliance Success:

With Accountability

Regular communication

Visible milestones

Build success

With Accountability

Regular communication

Visible milestones

Build success

Keep the Trust

CRITICAL SUCCESS FACTORS FOR ALLIANCES

It is not easy to initiate, build and manage alliance partnership to create an ecosystem that

provide unified experience and set of offerings backed up by network of partners. These are

governed by some critical success factors.

While this cannot be defined as standard, most of experts and users of such models have

reiterated some of success factors and compelling activities.

Individual Alliance Partner Relationship Matters

There is no shortcut to designing and implementing good partnerships. Even when no new

money is spent, the task requires the same depth of analysis that managers usually do when

they have to invest and define business case with assured return on investment.

Partnerships Need To Managed To Appear as One Group as Whole

Anything less than explicit group management constitutes a lost opportunity to create

competitive advantage. Opportunity costs can turn in to real costs if a partner ecosystem is left

untended and uncultivated

Growth and Expansion need Caution and Calculated Business Call

Often the different relationship success stories of various companies trigger pressure to forge

alliances with different companies. Usually when your competitors expand alliance network, you

often tend to come under pressure to increase your network by adding more par tners .

However, this may simply be theory and no practical benefits or performance improvement

may be accomplished. Alliance network should be expanded only when it makes strategic sense.

More importantly this expansion should consider organizational constraints and align with them

for growth of partner ecosystem. Then only your partner network will sustain.

Your Partnerships Define Your Market Positioning

This is essence of alliance partner network capabilities. Every network partner has

capabilities and so do your organization. Every partnership need to provide defined benefits

for the operating area of your company and add value to your market positioning.

Lack of commitment is flip side of Flexibility

Alliance groups can fall apart just as rapidly as they are formed. When rivalry amongst the

alliance partner is great, competition will benefit and such partnerships will go negative to

your success strategy. While you forge alliance with every partner, it is important to monitor

value add from them and not result in loss in competitive edge.


THE ANALYSIS

The Globalization and emergence of multiple technology leaders has evolved in to

competitive stage in market where collaboration is answer to limitations of doing on your own.

Many companies are unable to grow and sustain pace in complex market environment

and they often have to search for partner or partners to form groups. These groups are

formidable option to leaders and sometimes are far too large to be challenged. Such

Alliance and Partnerships with definite purpose is core to strategies of enterprises in recent

times.

Strategic Alliances that bring organizations together promise unique opportunities for all

partners. Successful strategic alliances manage the partnership, not just the agreement, for

collaborative advantage. Above all, they also pay attention to learning priorities in alliance

evolution. Cooperative agreements between two or more organizations—are a means to

enhance strategic resources: self-sufficiency is becoming increasingly difficult in a complex,

uncertain, and discontinuous external environment that calls for focus and flexibility in equal

measure. Everywhere, organizations are discovering that they cannot ―go it alone and must

now often turn to others to survive.

Change is only constant in today’s world. Competition is increasing due to access to skills

and technology is easier. Complexity in products and services is increasing. Markets a r e

far m o r e de r egu la t ed a n d f undamenta ls o f b u s i n e s s a r e c ha ng i ng . Capitalism is

unable to define who will lead markets. It is groups of partners that form Alliances revolving

around strategic roadmap and defined goals that are not contradicting are gaining

controls. The large corporations have seen huge pressures for sustaining such growth and

profits. They are looking towards new way of working everywhere. They are innovating and

accepting it is impossible to compete all alone.

At the same time it is not only signing these partnerships and getting documentation in place.

To make them deliver effective promises, the governance, engagement model, processes

and people driving them need to be correct. This is extremely complex in technology

company groups due to ever changing and evolving nature of product companies and

challenges to retain and use same talent in services companies. But without this, most of

Alliances fail to deliver. The message is clear, ―Strategic Alliances are need of the hour, but

they need to be managed well to succeed together and keep the promise to make customers

delight.


THE REFERENCES AND DISCLAIMER

The study and analysis of the paper is based on large access to information available on

Internet. Research reference from research firms like Gartner and Forrester has been

considered. Various interviews and research material, white papers on Internet are referred.

Multiple reading material and case studies are referred including Harvard Business Reviews

and real life cases of alliance ecosystem in Information Technology markets.

The discussion with key executives and presentations from leading Information Technology,

Telecommunication and Product companies, software companies has been referred for completion of

this report.

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Strategic alliances

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