Reasons to align Reasons to align Mutual Benefit between the two parties. Mutual Benefit between the two parties. Once we build up the alliance, which part of our organization may get improved. Once we build up the alliance, which part of our organization may get improved. The Seven General Areas The Seven General Areas What IS In IT For You ? What IS In IT For You ? Back to Porter’s Five Forces Back to Porter’s Five Forces WHERE & WHO WHERE & WHO Why we build ALLIANCE ??

7 general areas in which you can profit from building alliances Products Products Access Access Operations Operations Technology Technology Strategic Growth Strategic Growth Organization Organization Financial Stability Financial Stability

What Is In It For You??? Technological Sophistication Technological Sophistication Training Training Increased Market Share Increased Market Share Improved Customer Service Improved Customer Service Innovation Innovation Cost Savings Cost Savings Financial Stability Financial Stability Buying Parity with Giants Buying Parity with Giants Supply Chain Improvements Supply Chain Improvements Productivity Increases Productivity Increases

Technological Sophistication Lack of technological capability. Lack of technological capability. By Exchanging Technology By Exchanging Technology Compliment Basic Strengths Compliment Basic Strengths Shore Up Weaknesses Shore Up Weaknesses Improve Production Capability Improve Production Capability Case: Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems Case: Kinko’s Service Corp. (copy centers) and Xerox Engineering Systems Kinko’s Product Kinko’s Product Xerox’s Finance Xerox’s Finance

Training Learning Curve Commitment Learning Curve Commitment Obviously in Production Facility Obviously in Production Facility Employees perform task more Efficiently Employees perform task more Efficiently Cost savings passes along the curve as experiences are increased Cost savings passes along the curve as experiences are increased May consider to Align with suppliers May consider to Align with suppliers Case: Toyota and its auto part suppliers Case: Toyota and its auto part suppliers Toyota gave training to its suppliers to develop auto parts to achieve low cost strategy 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. Training regarding the usage of products being sold is important to dealers. Dealers can better serve end consumers Dealers can better serve end consumers Higher Customer Satisfaction Higher Customer Satisfaction Higher Sales Higher Sales Improved internal structure Improved internal structure Case: Guggenheim Dental (dental supplier distributor) and their top customers Case: Guggenheim Dental (dental supplier distributor) and their top customers Training (contd.)

Major factor that organizations partner with each other to form an alliance. Major factor that organizations partner with each other to form an alliance. Many approaches to increase market share could be: Many approaches to increase market share could be: Co-Branding Co-Branding Case: Barcadi and Coca Cola Case: Barcadi and Coca Cola Case: Nestle and Rold Gold Pretzels Case: Nestle and Rold Gold Pretzels Access to new market Access to new market Case: Copeland Corp. and Kirloskar Case: Copeland Corp. and Kirloskar Decrease Direct Competition Decrease Direct Competition Case: Sunmicrosystem and IBM Case: Sunmicrosystem and IBM Barriers to entry by new entrant Barriers to entry by new entrant Case: GTE and Pacific Bell Case: GTE and Pacific Bell Increased Market Share

Provide better and quicker customer service while keeping their costs manageable. Provide better and quicker customer service while keeping their costs manageable. Improved attitude toward customer service Improved attitude toward customer service Improved customer loyalty Improved customer loyalty Case: United Airlines & Starbucks Case: United Airlines & Starbucks Improved product offering Improved product offering Case: Associated Building Services Case: Associated Building Services Improved Customer Service

To differentiate oneself from competition To differentiate oneself from competition Invent new product to the Market Invent new product to the Market Case: Steel case and Peerless Lighting Case: Steel case and Peerless Lighting Developed state-of-the-art Office Lighting Developed state-of-the-art Office Lighting Annual sales furniture jumped from $15 billion to $35 billion Annual sales furniture jumped from $15 billion to $35 billion Differentiation and Less direct competition Differentiation and Less direct competition Innovation

Cost can be saved up in many areas Cost can be saved up in many areas Manufacturing : Sharing resources, outsourcing Manufacturing : Sharing resources, outsourcing Case: Airbus and Rolls-Royce Case: Airbus and Rolls-Royce Shared Location : Stores within stores have become common place through alliance relationships Shared Location : Stores within stores have become common place through alliance relationships Case: McDonalds and Wal-Mart Case: McDonalds and Wal-Mart Cost Savings

Risks are also be Shared among partners Risks are also be Shared among partners Access to capital Access to capital Achieving EoS Achieving EoS Partnering with poor economy or recession Partnering with poor economy or recession Case: Continental Airlines and Swan Optical Case: Continental Airlines and Swan Optical Financial Stability

Better deal in parity with giants in their industry Better deal in parity with giants in their industry Additional discounts and services for in-depth marketing and technical expertise. Additional discounts and services for in-depth marketing and technical expertise. Win/Win pricing between long term buyer/seller alliance Win/Win pricing between long term buyer/seller alliance Case: American Dental Cooperative members (dental distributors) Case: American Dental Cooperative members (dental distributors) Buying Parity with Giants

Just-in-time inventory purchasing and supplying Just-in-time inventory purchasing and supplying Case: Wal-Mart and Proctor & Gamble Case: Wal-Mart and Proctor & Gamble Other Benefits: Other Benefits: Management of supply channel conflict Management of supply channel conflict On-time product delivery On-time product delivery Prompt response to complaints Prompt response to complaints Improved supply chain productivity Improved 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 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. Case: Brown & Root/Braun’s with Union Carbide Corp. Partnering with the Experienced Partnering with the Experienced Alliance can also increase productivity by: Alliance can also increase productivity by: Improve product quality Improve product quality Improve working relationships Improve working relationships Improve communication Improve communication Improvement of products/services Improvement of products/services Productivity Increases

Conclusion As 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!” As 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!”