Reasons to alignMutual Benefit between the two parties.

Once we build up the alliance, which part of our organization may get improved.

The Seven General Areas

What IS In IT For You ? Back to Porter’s Five Forces WHERE & WHO

Why we build ALLIANCE ??

7 general areas in which you can profit from building alliances

Products

Access

Operations

Technology

Strategic Growth

Organization

Financial Stability

What Is In It For You???• Technological Sophistication

• Training

• Increased Market Share

• Improved Customer Service

• Innovation

• Cost Savings

• Financial Stability

• Buying Parity with Giants

• Supply Chain Improvements

• Productivity Increases

Technological Sophistication

Lack of technological capability.

By Exchanging Technology Compliment Basic Strengths Shore Up Weaknesses Improve Production Capability

Case: Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems

Kinko’s Product Xerox’s Finance

TrainingLearning Curve Commitment

Obviously in Production Facility Employees perform task more Efficiently Cost savings passes along the curve as experiences

are increased

May consider to Align with suppliers

Case: Toyota and its auto part suppliers Toyota gave training to its suppliers to develop auto

parts to achieve low cost strategy

Training regarding the usage of products being sold is important to dealers.

Dealers can better serve end consumers Higher Customer Satisfaction Higher Sales Improved internal structure

Case: Guggenheim Dental (dental supplier distributor) and their top customers

Training (contd.)

Major factor that organizations partner with each other to form an alliance.

Many approaches to increase market share could be:Co-Branding

Case: Barcadi and Coca Cola Case: Nestle and Rold Gold Pretzels

Access to new market Case: Copeland Corp. and Kirloskar

Decrease Direct Competition Case: Sunmicrosystem and IBM

Barriers to entry by new entrant Case: GTE and Pacific Bell

Increased Market Share

• Provide better and quicker customer service while keeping their costs manageable.• Improved attitude toward customer service• Improved customer loyalty

• Case: United Airlines & Starbucks

• Improved product offering• Case: Associated Building Services

Improved Customer Service

To differentiate oneself from competition

Invent new product to the Market

Case: Steel case and Peerless Lighting Developed state-of-the-art Office Lighting Annual sales furniture jumped from $15 billion to

$35 billion Differentiation and Less direct competition

Innovation

Cost can be saved up in many areasManufacturing : Sharing resources, outsourcing

Case: Airbus and Rolls-Royce

Shared Location : Stores within stores have become common place through alliance relationships

Case: McDonalds and Wal-Mart

Cost Savings

Risks are also be Shared among partnersAccess to capital Achieving EoS Partnering with poor economy or recession

• Case: Continental Airlines and Swan Optical

Financial Stability

Better deal in parity with giants in their industry

Additional discounts and services for in-depth marketing and technical expertise.

Win/Win pricing between long term buyer/seller alliance

Case: American Dental Cooperative members (dental distributors)

Buying Parity with Giants

Just-in-time inventory purchasing and supplying

Case: Wal-Mart and Proctor & GambleOther Benefits:

Management of supply channel conflictOn-time product deliveryPrompt response to complaintsImproved supply chain productivity

Supply Chain Improvements

Increase the ability for the companies to pull up their quality as well as the number of units being produced• Case: Brown & Root/Braun’s with Union Carbide

Corp. • Partnering with the Experienced

Alliance can also increase productivity by:Improve product qualityImprove working relationshipsImprove communicationImprovement of products/services

Productivity Increases

ConclusionAs from the article, we can observe that

most of the areas are within realistic concerns and therefore could be overcome by forming an alliance and then we will be able to answer that “what’s in it for you!”