Overview of the Genetic Information Nondiscrimination Act
Rwb October 27 Part I What Every Business Executive Needs To Know About Strategic Alliances
1.
2. Definitions and Examples
Three Reasons to Enter a Strategic Alliance
Twelve Critical Success Factors For Strategic
Alliances
The Six Top Tips Thou Shall Never, Ever
Forget in a Strategic Alliance
Ronald W. Brown, Esq., MBA
3. A Strategic Alliance is a formal
relationship between two or more
parties to pursue a set of agreed upon
goals or to meet a critical business
need while remaining independent
organizations.
Partners may provide the strategic
alliance with resources such as
products, distribution channels,
manufacturing capability, project
funding, capital equipment,
knowledge, expertise, or intellectual
property.
The alliance is a cooperation or
collaboration which aims for a
synergy where each partner hopes
that the benefits from the alliance will
be greater than those from individual
efforts.
Ronald W. Brown, Esq., MBA
4. Health Care Entities
Law Firms
Airlines
Telecommunications
Companies
Pharmaceutical Companies
Automotive Companies
The Efficiency Experts.
Do-You Enterprise Services
Ronald W. Brown, Esq., MBA
5. A joint venture (JV or J-V) is a legal entity formed
between two or more parties to undertake an economic
activity together.
The JV parties agree to create, for a finite time, a new
entity and new assets by contributing equity.
They then share in the revenues, expenses and assets and
"control" of the enterprise
Ronald W. Brown, Esq., MBA
6. Ronald W. Brown, Esq., MBA
Your Marriage
Scarecrow, Dorothy,
Lion, and Tin Man
The Four Tops and The Temptations
The Legion of Superheroes
Inspector Renault and Rick at
the end of Casablanca
7. To do more and better
with someone else than
you can do by yourself.
To enter a new business
market or geographic
territory that might
otherwise be closed to you.
As a tool to execute a well
thought out strategic
business development plan
and strategy.
Ronald W. Brown, Esq., MBA
8. Every strategic alliance
entails some amount of
faith, and at least two
forms of trust. Anyone
who has ever been in a
strategic alliance has had
to have faith in the future
success of the alliance.
And perhaps even had to
make a leap of faith in the
face of innumerable
uncertainties in a strategic
alliance.
Ronald W. Brown, Esq., MBA
9. “Small opportunities
are often the
beginning of great
enterprises”---
Demosthenes
“If you always do
what you have always
did, then you will
always get what you
always got.” –Jackie
“Moms” Maybley
Editor's Notes
EFX is a full service business enterprise, that provides business owners with the systems, procedures, and controls needed to become successful in an increasingly competitive environment. EFX is staffed by a multi-state team of experienced, independent professionals, providing a one stop shop of many business services.
By taking a team approach to providing services, EFX is able to provide this broad portfolio of services and to staff engagements with the most effective and cost efficient skill sets. The firm is a strategic alliance collaboration of professionals, liked through contracts, to provide services to EFX clients. It is intended and expected that this business model will allow EFX to not only provide its expertise domestically, but also globally.
Consider another example. “Do-You Enterprise Services” (“DYES”), a SBE entrepreneurial professional services firm consisting of four Principal members, received a copy of an RFP from a “Major Company”. Each Principal thought the firm should respond to the RFP but each also had reservations. One Principal thought DYES had some of the skills required to meet the deliverable required by the RFP but she was concerned that the firm did not have all of the skills covered in the RFP. Another Principal felt that the contract might be beyond the firm’s financial capability. The third Principal was concerned that though the firm had been in business for several years and was growing, it lacked the track record he assumed Major Company would require in order for the firm to win the business. The fourth Principal thought where there is a will, there is a way. The challenge was to find that way. The entrepreneurs in DYES had a choice: pass up the RFP or figure out a way to pursue it.
What did DYES do? DYES went after the RFP and won it, reflecting an understanding of the Yoruba proverb, the insight from “Moms” Mabley, and Demosthenes words at the beginning of this presentation. How did DYES do it? Through a strategic alliance arrangement, DYES’s entrepreneurs went outside to get the skill sets it lacked but needed in order to get the project. DYES partnered with another firm in order to capture the business opportunity presented in the RFP. Though several forms of alliance were available for DYES to consider, after careful review DYES selected a Collaboration Agreement for its alliance. DYES also used the 13 Critical Commitments I will talk about shortly as a checklist for its strategic alliance. In selecting a Collaboration Agreement, DYES was very concerned that the project that was the subject of the RFP be successfully completed. DYES was not looking to be merged into or acquired by its collaborative partner, simply to work out a relationship by which both parties could benefit from working together on one project.
DYES like any entrepreneur in that situation, had to deal with the potential double paralysis of a negative attitude and the inability to take positive action. DYES’s entrepreneurs, like many others, had never done a strategic alliance arrangement before. It was a new way of doing business on a project. In order to move ahead, DYES had to confront the challenge of change. As Peter Drucker has observed “systematic innovation requires a willingness to look on change as an opportunity.” Changing the way you have done business — perhaps from acting alone and in isolation to acting together with someone else in collaboration — is a challenge. Not everyone is up to it. Are you? Asking that question of yourself and answering it honestly is tough. The words “To thine own self be true….” may find no higher testing than when required for an SBE entrepreneur thinking about a strategic alliance.
Think about these quotations. Each one contains some wisdom that applies to life and business, and particularly to how we can approach change, challenge, and opportunity. Though the observations were not referring to strategic alliances, the quotes are applicable to them today. Why should an SBE consider entering into a strategic alliance? What are the possible problems, pitfalls, as well as opportunities and profit potentials? Is this business tool for you?
There are a variety of positives, as well as some negatives in a strategic alliances and it is important to understand what is required for a strategic alliance to succeed, to understand the critical/key success factors for the business and industry the strategic alliance is in, and the reasons why strategic alliances fail. Every business and industry has key success factors and key performance indicators. Key performance indicators are important to any professional services firm. For example, in a project based professional services firm, there are at lease four critical key performance indicators. To give another illustration, airlines are in part a service business enterprise and to be successful “an airline must be effective in four general areas: (1) attracting customers; (2) managing its fleet; (3) managing its people, and (4) managing its finances.” If the word “assets” is substituted for “fleet” in this formulation it could apply to and be among the success factors in any service business. In addition it is important to recognize that increasingly entrepreneurs are not just entering into those alliances in their home markets, but also globally, and to understand, monitor, and execute using the critical/key success factors for your business and industry.
On balance, when properly structured, and in the right situations, a strategic alliance can be a very useful business tool that works well, and launches the beginning of a great enterprise. A strategic alliance is a powerful tool that can open new doors/avenues, maximize profits, and increase business networks for future partnerships, not only in times of economic downturn, but in a flourishing economy by utilizing multiple skill sets for a common goal.
“Occupying the broad middle ground between cutthroat competition and outright merger, a strategic alliance can be almost any collaborative arrange by which companies share capital, technology, distribution networks, manufacturing facilities, or a host of other resources.” Editorial Review, Harvard Business Review on Strategic Alliances.
See Managing Alliances With The Balanced Scorecard by Robert S. Kaplan, David P. Norton, and Bjarme Rugelsjoen. http://hbr.org/2010/01/managing-alliances-with-the-balanced-scorecard/ar/1 (“Why do alliances fail so often? The prime culprit is the way they are traditionally organized and managed. Most alliances are defined by service level agreements (SLAs) that identify what each side commits to delivering rather than what each hopes to gain from the partnership. The SLAs emphasize operational performance metrics rather than strategic objectives, and all too often those metrics become outdated as the business environment changes. Alliance managers don’t know whether to stick to the original conditions or renegotiate.”)
See for example “Key Performance Indicators of Sales Success in a Professional Services Firm” http://www.beyondreferrals.com/graphics/Key%20Performance%20Indicators.pdf
For example, see “Key Performance Indicators in Professional Services Firms”. (“Four major factors affect the performance of project based professional service firms:
The ratio of senior to junior staff referred to as the firm’s leverage, the average fee
charged per unit of time, the percentage of billable time referred to as utilization, and
the profit margin ( http://www.systemdynamics.org/conferences/2009/proceed/papers/P1279.pdf
“Airline Industry Key Success Factors” by Richard M. McCabe, Ph.D., Graziadio Business Report, Volume 09, Issue 4.
Id. (Key success factors have several direct and several possible uses for any business unit whether it is for-profit or not-for-profit, large or small, domestic or foreign. In strategic analysis of a business unit, key success factors often initially appear as analytical tools for examining the character of the industry in which the business unit competes. In the startup and early growth phases of an industry, the general guidance from Thompson et al. may be sufficient: "Only rarely are there more than five or six key factors for future competitive success." However, as an industry approaches maturity, rivalry among competing business units often increases. Consolidation of the industry often follows. As a rivalry increases and consolidation proceeds, the number of key success factors is likely to increase. Although there are few purely domestic industries today, as rivalry increases in an industry, business units are increasingly likely to expand into foreign markets in order to grow. For several stakeholders—at least for customers, employees, and suppliers—additional key success factors may also be required as the business grows more complex, if only because of the increase in national and regional cultures to be considered.”)
See Harvard Business Review Article, The Global Entrepreneur, by Daniel J. Isenberg http://hbr.org/product/the-global-entrepreneur/an/R0812J-PDF-ENG?Nao=330. (“For over a century, start-ups began by focusing on their home markets. More and more, however, are now being born global - chasing opportunities created by distance, learning to manage faraway operations, and hunting for the planet's best manufacturing locations, brightest talent, most willing investors, and most profitable customers wherever they may be - from day one. To succeed, Isenberg has found, global entrepreneurs must cultivate four competencies: They must clearly articulate their reasons for going global, learn to build alliances with more powerful partners, excel at international supply chain management, and create a multinational culture within their organization.”)
“An estimated 20,000 corporate alliances have been formed worldwide over the past two years. Such strategic alliances can provide business owners with long-term security, new revenue channels, and, often, the anchor needed to maintain stability in otherwise turbulent waters.” Editorial Review, Strategic Partnerships: An Entrepreneurs Guide to Joint Ventures and Alliances.”
