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WINNING ALLIANCES

WHY JOINING FORCES WITH THE RIGHT PARTNER IS NOT ENOUGH

WHY ALLIANCES ARE SO IMPORTANT

An alliance is an engine for growth and progress. Two or more parties join forces when they realize that their combined resources and talents will produce better outcomes than if the parties were to act on their own.

 

Today's decision makers are finding that the right alliances enable them to reduce project investment costs, rapidly enter new markets, more reliably increase initiatives' success rates, better keep pace with market changes, and more assuredly thwart off competitive threats than if they were to attempt to navigate these challenges alone.

THE 6 TYPES OF ALLIANCES

EXPANDING OPPORTUNITIES BY USING A SPECIFIC ALLIANCE AS A TOOL

Among the common assumptions and misconceptions about alliances is the notion that organizational alliances are restricted to "partnerships", "mergers", and "acquisitions". 

There are actually 6 different forms of alliances, each with varying levels of commitment and providing different benefits to their allies.

Armed with the right terminology and some basic knowledge about establishing alliances, you can be in the ready position to capture and create opportunities that may otherwise elude you and your organization.

Source - Paid to THINK: A Leader's Toolkit for Redefining Your Future

Ad Hoc

An impromptu committee that fulfills a specific purpose and disbands as soon as that purpose is fulfilled.

Short Term - Low Resources

Consortium

A band of groups or individuals who pool limited resources like dues in pursuit of leverage and shared outcomes.

Long Term - Low Resources

Project Joint Venture

Two or more parties contribute specific resources for the duration of a particular project and part ways once the project is completed.

Short Term - Medium Resources

Joint Venture

Two or more parties who maintain individual ownership and management structures but who share resources, risks, and equity for a particular venture.

Long Term - High Resources

Merger

Two or more groups unite into a single legal entity sharing ownership, leadership, assets and resources.

Long Term - High Resources

Acquisition

One entity takes complete control over another through takeover or buyout proceedings.

Long Term - High Resources

THE POWER OF ALLIANCE TERMINOLOGY

Hey, David here. I wanted to share a story with you to illustrate the benefits of knowing the 6 types of alliances.

Years ago, I walked into a client's office. He was on the phone with a business colleague, and he was struggling to persuade this person to "partner up" with him.

 

I motioned for him to end the call and say that he would call the person back momentarily.

 

During the interim, I explained the 6 alliance options to him. He selected the the form that best suited his needs and called the person back.

 

Using his new vocabulary, he was able to clearly communicate their joint objectives, expectations, and anticipated outcomes.

 

And in less than ten minutes, he had secured the largest contract of its type in his industry! 

Alliances - Acquisitions

WHY JOIN FORCES?

In the late 1980s and early 1990s, the number of business alliances quadrupled, prompting several researchers to find out why.  Researcher E. Zajac uncovered four common categories and their breakdowns by percentage.

35%

25%

NEW TECHNOLOGY

20%

ECONOMIES OF SCALE

20%

LEGAL OR REGULATORY

COMPETITION/

DISTRIBUTION

Source: Lorange & Roos, Strategic Alliances: Formation, Implementation, and Evolution.

The Ten Alliance Killers

01

UNCERTAINTY

02

APATHY

03

DELUSION

04

GRANDEUR

05

ETHNOCENTRICITY

06

INCOMPATIBILITY

07

SELFISHNESS

08

SLOPPINESS

09

IGNORANCE

10

DECEIT

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