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Boost your growth through strategic collaborations and partnerships
 

Boost your growth through strategic collaborations and partnerships

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    Boost your growth through strategic collaborations and partnerships Boost your growth through strategic collaborations and partnerships Presentation Transcript

    • Allianceexperts1Boost Your Growth Through StrategicCollaboration and PartnershipsAlfred Griffioen
    • Allianceexperts2Alfred Griffioen•  Specialist in business partnerships andalliances•  Track record in marketing, businessdevelopment and strategy consulting•  Author of 2 books about alliances andcompetitive advantage and 1 aboutstrategy•  Certified Strategic Alliance Professional•  Founding partner of Alliance experts
    • Allianceexperts3NetherlandsHong KongSingaporeSouth AfricaYour partnershiptransparant,measurable &profitablelocal & internationalAlliance experts: a network of partnership specialists
    • Allianceexperts4We help you (and your partners) on your way, step by step1.  Partner selection: You are seeking a strategicbusiness partner, and we introduce you tointerested candidates.2.  Deal structuring: You formulate your wishesregarding the partnership, and we provide astructure and a contract.3.  Benchmarks: we offer benchmarks and trainingsto help boost your success.Our services come with fixed prices and concreteresults, see www.allianceexperts.com.We work for governments and multinationals, as wellas for a growing group of SME firms.Partner strategy,search & selectionDeal structuringBenchmarks
    • Allianceexperts5The cloud simplifies collaboration• Unlike 10 years ago, there aremany collaboration tools available• This limits the need for physicalproximity or travel• Although there is a difference infeatures and security, all tools havethe same functions:-  Joint data storage-  Joint editing-  Voice and video conferencingOur topic for today:How to use collaboration toexpand the cloud even further?
    • Allianceexperts6Typical aspects of the IT market• High degree of specialisation• Customers want an integrated solution• Proprietary solutions versus standardisation• Location independent delivery possible, but localised distribution necessary
    • Allianceexperts7Agenda1.  Benefits from strategic collaboration and partnerships2.  How to connect your partnering strategy to your general strategy?3.  How to find the partners that best fit your business objectives?4.  Types of partnerships and how to negotiate the optimal agreement.5.  Partner management
    • Allianceexperts8Differentiation is the path to profitability§  Differentiation is the basis for making a profit§  With an offer different from the rest you have a kind of monopoly: you canpick your optimum price on the demand curve§  Without differentiation one can only follow the price of the competitorsnumberssoldnumberssoldin competitionmonopolypricecostsprofitdemand curvepricecostsprofitdemand curvepricecostsprofitdemand curveprice of thecompetitorpricecostsprofitdemand curveprice of thecompetitor
    • Allianceexperts9Competitive advantageWhich of these competitors has the biggest competitive advantage?
    • Allianceexperts10Partnerships are an important means of achieving competitiveadvantagePurchaseInvestments üRisks üTime üExclusivity ûInvest yourselfInvestments ûRisks ûTime ûExclusivity üPartnerInvestments üRisks üTime üExclusivity üDo a take-overInvestments ûRisks ûTime üExclusivity ü
    • Allianceexperts11Just an opinion
    • Allianceexperts12Just an example
    • Allianceexperts13Test: how network ready is your company?§  Self assessment on the internet with15 research questions§  12 questions on various aspects ofpartnership management§  3 questions on the company’s ownperception of outcomes: networkreadiness, performance, agility§  Feedback in a free 5-page benchmarkreport based on large data sample314%Your%score: 86%65%Your%score: 95%6In&this&survey&we&asked&quesFons&on&your&insight&in&your&current&network&of&partners,&your&openness&to&new&partners&and&how&oZen&you&take&the&iniFaFve&to&set&up&new&collaboraFons.&This&resulted&in&the&following&score&for&strategic&intent.&Alliance&life&cycle&management&&An&alliance&is&an&agreement&between&two&or&more&independent&parFes,&entered&into&in&order&to&advance&common&goals&and&to&secure&common&interests.&An&important&characterisFc&is&risk&sharing,&which&is&what&disFnguishes&the&collaboraFon&from&a&transacFonal&relaFonship.&In&an&alliance,&outcomes&like&market&penetraFon,&technological&development&or&costs&are&uncertain&at&the&outset,&and&both&parFes&can&either&benefit&or&suffer&accordingly.&&The&search&for&an&alliance&partner&should&always&start&with&an&assessment&of&what&resources&or&competences&you&need,&and&what&the&profile&of&the&perfect&partner&would&be.&ProspecFve&partners&that&have&a&similar&size,&organisaFonal&culture,&have&their&headquarters&nearby&and&that&already&have&experience&with&other&collaboraFons&offer&the&best&chance&of&a&long<lasFng&relaFonship.&&The&good&news&is&that&alliances&can&be&structured&deliberately&and&aspects&can&be&modelled&and&even&standardised.&Through&our&research&we&have&idenFfied&ten&types&of&alliances,&such&as&franchising,&co<branding&or&shared&investments.&For&each&type&it&is&possible&to&list&the&most&important&variables&for&the&spli]ng&of&revenues&and&costs,&and&to&find&best&pracFces&for&assigning&decision&power,&risks&and&intellectual&property&rights.&In&this&way&the&relaFvely&unknown&skill&of&structuring&and&managing&alliances&can&be&learned&easily.&&In&this&survey&we&asked&about&the&ease&to&select&a&partner,&to&conclude&an&agreement,&to&start&and&scale&the&collaboraFon&and&we&asked&whether&you&agree&upon&exit&clauses&already&at&the&beginning&of&a&partnership.&&This&resulted&in&a&score&for&alliance&life&cycle&management.&If&you&want&to&know&more&in&detail&what&concrete&measures&you&can&take&to&improve&the&alliance&life&cycle&management&of&your&company,&then&we&have&a&50<quesFon&survey&that&you&can&use&as&a&self<assessment&and&checklist.&StrategicintentAlliancelife cyclemanage-ment0&0.05&0.1&0.15&0.2&0.25&0.3&0.35&0.4&0.45&0.5&0%&10%&20%&30%&40%&50%&1& 2& 3& 4& 5& 6& 7&Companies&performing&beJer&Companies&performing&similar&or&worse&0&0.05&0.1&0.15&0.2&0.25&0.3&0.35&0.4&0.45&0.5&0%&10%&20%&30%&40%&50%&1& 2& 3& 4& 5& 6& 7&Companies&performing&beJer&Companies&performing&similar&or&worse&
    • Allianceexperts14Agenda1.  Benefits from strategic collaboration and partnerships2.  How to connect your partnering strategy to your general strategy?3.  How to find the partners that best fit your business objectives?4.  Types of partnerships and how to negotiate the optimal agreement.5.  Partner management
    • Allianceexperts15Managing a company used to be easy
    • Allianceexperts16The world has changed and information has become more easilyavailable
    • Allianceexperts17Competing on price doesn’t work any more050010001500 Video recordersDVD-playersPrice (€)
    • Allianceexperts18This also changes strategyüThe three strategies ofMichael Porter (1980)The three directions ofTreacy & Wiersema (1995)What happened in theinternet age? Current validityFocus strategy:targeting on a nicheCustomer intimacy:having a complete offeringfor specific customer groupsThere are many supplierswith a broad offering.Customers can chooseCustomer relevance:being seen as relevantby your customer groupüProduct differentiation:having a better productProduct leadership:continuously introducing newproductsThe enormous diversity ofproducts makes it hard tostand out(Continuously) havingunique productsûCost leadership:having the lowest costsOperational excellence:having the lowest total costs,including costs of your clientCost advantage is easilycopied or leveled down.Scale can be boughtOnly short termadvantages
    • Allianceexperts19CustomerrelevanceUnique productCost advantagePurpose of the allianceStrategy Basic formEach strategy has its specific types of partnershipsUsing the other partys local presenceand serviceDistribution agreementExpanding ones own perceivedpresenceFranchisingIncreasing the chance of obtainingleadsproposition alignment andreferralExpanding ones own market to largerprojectsCollaborative offeringUtilizing the relevance of the otherpartys brandCo-brandingUtilizing the other partys developmentcapacityJoint R&DUtilizing the other partys technology Technology licensingAchieving scale advantage and riskreductionShared investmentLimiting ones own staffing Reciprocal hiring agreementUtilizing the other partys cost benefitsand experienceUnusual supplier risk
    • Allianceexperts20Partnerships or alliances can differ in intensityPartnership or alliance Merger oracquisitionMarkettransactionShort term Long termLimitedimportanceHighimportanceLimitedinvolvementHighinvolvement
    • Allianceexperts21StartPlan Partner ManagementPartneringStrategyPartnerSearch &SelectionDealStructuringExit /ReviseMaintainApproach ExecuteThe partnership life cycle: approach and execution
    • Allianceexperts22Agenda1.  Benefits from strategic collaboration and partnerships2.  How to connect your partnering strategy to your general strategy?3.  How to find the partners that best fit your business objectives?4.  International partnerships: specific countries and cultures.5.  Types of partnerships and how to negotiate the optimal agreement.6.  Partner management
    • Allianceexperts23What would be the next step for your organisation?§  What kind of knowledge and competencies does your company need?§  What customers you would like to get in touch with?§  What do you need to enter into the next growth phase for your company?§  if you would hire a new executive, what should he or she do?
    • Allianceexperts24The profile of the right partnerSmallStart-upKnowledgeLimiteddependenceManpowerLargeMatureNetworkLargeinterdependenceAssets
    • Allianceexperts25Assignment: now draft your partnering profile§  Describe your company in maximum 3 lines, including some key figures§  What makes your company unique in its market?§  What is your ambition for the next three years?§  What should a partner add?§  What is the benefit for the partner working with you instead of anothercompany?§  How would you like to split revenue and costs?
    • Allianceexperts26How to find a partner?§  Make clear what you want and what you can offer§  Use your own network of business and personal contacts-  Customers-  Industry organisations-  Friends§  Use intermediaries-  Mind their network and local presence-  Their is a difference between sourcing and finding business partners-  Let your intermediary always provide multiple candidates
    • Allianceexperts27How to select the right partner?§  Work from a long list to a short listand to a final choice§  Have research and partner duediligence done properly§  Look at your benefits and risks, butalso look at the partner’s benefits andrisks
    • Allianceexperts28Agenda1.  Benefits from strategic collaboration and partnerships2.  How to connect your partnering strategy to your general strategy?3.  How to find the partners that best fit your business objectives?4.  Types of partnerships and how to negotiate the optimal agreement.5.  Partner management
    • Allianceexperts29Structuring the deal• Start with the outlines for thepartnership• Negotiate first without the lawyersinvolved: work towards a deal sheet• Check whether the right incentives are inplace for each partner and chanches onopportunistic behaviour are small• Then have the partnering arrangementdrafted in a balanced wayPartner selectionDetermining thetype of partnershipFinancial optimisationDrafting thepartnership agreement
    • Allianceexperts30For every partner there needs to be the right balanceResourcesResponsibilitiesRiskRewardsRuling power
    • Allianceexperts31Basis types help to structure the collaborationCustomerrelevanceUnique productCost advantagePurpose of the allianceStrategy Basic formUsing the other partys local presenceand serviceDistribution agreementExpanding ones own perceivedpresenceFranchisingIncreasing the chance of obtainingleadsproposition alignment andreferralExpanding ones own market to largerprojectsCollaborative offeringUtilizing the relevance of the otherpartys brandCo-brandingUtilizing the other partys developmentcapacityJoint R&DUtilizing the other partys technology Technology licensingAchieving scale advantage and riskreductionShared investmentLimiting ones own staffing Reciprocal hiring agreementUtilizing the other partys cost benefitsand experienceUnusual supplier risk
    • Allianceexperts32The basic type is independent of the legal formMinorityshareTraditionalcontractJointVentureDissolvea company• Transactional customer/supplier relations•Joint R&D, marketing,distribution•One sided•Exchange of shares•50% - 50%•Other proportions•Merger•TakeoverPartnerships• Licensing, franchising• Long term outsourcingUnilateralagreementBilateralagreementContractualagreementsSharetransactions
    • Allianceexperts33Structuring the collaboration can be done with questionnaires1. One questionnaire to determine the basic form or combinations thereof2. Questionnaires per basic form•  Scope and content of the collaboration•  Roles and obligations of each party•  Financial model•  What if things go wrong?•  Termination of the agreement3. Specific legal clauses•  Contract duration•  Changes•  Liabilities•  Confidentiality
    • Allianceexperts34Example: distribution agreement§  Scope of products and services being distributed§  Obligations of the supplier: marketing materials, training, delivery, qualityassurance§  Obligations of the distributor: planning, sales effort and reporting,personnel§  General terms and conditions for the sales to clients§  Who will invoice the customer for initial and follow-up sales?§  Exclusivity and selling competing products§  Minimum turnover or growth path for the distributor§  Transfer pricing and price adaptations, pace list§  Minimum investments of the distributor in facilities, stocks and training§  Termination of the agreement§  Client ownership in case of termination
    • Allianceexperts35Discussion topic: how to maximise your distributor’s sales effort?§  Every contract has metrics. For distribution partnerships the mostimportant are:-  Expected or minimum sales volumes-  Transfer price between the supplier and the distributor-  Expected sales price-  Marketing and/or training budgets
    • Allianceexperts36Four complicating factorsDifference in size• Importance of partnership may differ• The big party can easily putpriorities differently• Key personnel of the smaller partymight leaveSmall companies• Costs of drafting the contract andthe bookkeeping weigh heavily• Personal relationships are important• Simple collaboration form ispreferred above complex contractThree or more parties• Risk than one companywill be overruled• Uncertainty leads to safe playing• Necessary to list what decisionsneed to be made unanimouslyPublic-private• Targets of governments are notfinancial: this is just a constraint• Government can best be facilitating• Cultural differences need extraattention
    • Allianceexperts37Agenda1.  Benefits from strategic collaboration and partnerships2.  How to connect your partnering strategy to your general strategy?3.  How to find the partners that best fit your business objectives?4.  Types of partnerships and how to negotiate the optimal agreement.5.  Partner management
    • Allianceexperts38Managing partnerships is a profession and can be learnedResearch by the University of Rotterdaminto 49 companies shows that success asmeasured in profits, achieving targets andthe quality of the relationship increaseswith experienceThe learning effect tends to level off fromthe 6th allianceMore success can be achieved through:- Structured evaluation + 38 %- Hiring a specialist + 45 %- Training in the subject + 76 %6Number of alliancesSuccessratio
    • Allianceexperts39Google introduces its Cloud Platform Partner Program
    • Allianceexperts40The salesforce partner network
    • Allianceexperts41The SAP ecosystem shows different types of partners
    • Allianceexperts42Our guest presenter for today: Stanimira Koleva• •  General manager SMS&P•  Responsible for partnermanagement in the APAC region•  Previously with Cisco and 3Com
    • Allianceexperts43
    • Allianceexperts44Partner management for smaller companies• Start with the final situation in mind-  Spread your investments-  What you structure, structure it well• Be carefull with exclusivity• Reward team work• Mind the different cultures• Make distinctions in levels
    • Allianceexperts45What can you arrange within your company? Internal checkSample questions:2.  Our company has formulated a partnering strategy,comparable to for example an acquisition strategy12. We have a structured process for partner selection,also taking into account strategic and culturalaspects18. Top-level management meets to clarify mutualexpectations before the agreement is signed31. With our business partners we follow fixedprocedures for escalations and conflict resolution45. People who are managing a partnership followtraining on soft-skills and know how to intervene ifa joint team is not performing optimally4Starting(and(scaling(the(partnershipReporting,(evaluation(and(unlinking1& 2& 3& 4& 5& 6& 7&1& 2& 3& 4& 5& 6& 7&29.&We&have&a&good&understanding&which&parts&of&our&acDviDes&are&crucial&for&the&partner&and&vice&versa&28.&Our&company&knows&how&to&set&up&a&mulDLlevel,&balanced&and&twoLway&communicaDon&structure&&&27.&Each&of&our&partnerships&has&a&clearly&defined&set&of&goals&and&key&performance&indicators&26.&With&all&relevant&partners&we&have&a&regularly&scheduled&joint&planning&process&25.&Our&organisaDon&adheres&to&commonly&known&project&management&and&organisaDon&standards&24.&Our&IT&systems&are&sufficiently&flexible&to&easily&incorporate&electronic&links&to&external&parDes&23.&We&can&easily&accommodate&if&teams&from&both&sides&want&to&work&from&a&joint&locaDon&22.&When&starDng&a&collaboraDon&we&always&perform&a&joint&risk&analysis&with&our&partner&21.&We&have&a&clear&process&in&place&to&quickly&reach&clarity&with&new&partners&as&regards&roles&and&responsibiliDes&&20.&We&always&organise&a&joint&kickLoff&meeDng&with&our&key&personnel&involved&and&the&partners&key&personnel&&1& 2& 3& 4& 5& 6& 7&1& 2& 3& 4& 5& 6& 7&40.&We&have&a&clear&process&to&access&whats&troubling&a&partnership&before&making&the&decision&to&end&it&39.&Joint&data&stored&with&one&of&the&partners&can&be&easily&copied&or&archived&for&parDes&aber&dissoluDon&of&the&partnership&38.&In&our&agreements&service&obligaDons&are&clearly&assigned&to&each&of&the&parDes&and&will&also&serve&aber&dissoluDon&37.&Upon&entering&a&partnership&our&company&already&makes&clear&agreements&about&its&dissoluDon&36.&We&frequently&check&whether&the&partnership&agreements&are&sDll&valid&and&are&not&conflicDng&other&plans&35.&Our&company&evaluates&partnerships&frequently&to&benchmark&these&and&to&derive&best&pracDces&34.&Our&company&ensures&that&the&KPIs&of&the&partnership&are&measured&and&discussed&regularly&with&the&partner&33.&Personnel&involved&in&a&partnership&are&rewarded&more&onthe&success&of&the&partnership&than&of&the&own&organisaDon&&32.&Our&company&has&the&flexibility&to&change&reporDng&lines&from&line&management&to&the&management&of&the&partnership&31.&With&our&business&partners&we&follow&fixed&procedures&for&escalaDons&and&conflict&resoluDon&30.&We&can&easily&align&our&internal&reporDng&structure&with&the&governance&structure&for&the&partnership&
    • Allianceexperts46Evaluation is the most important way to enhance partneringsuccessPer partnership: periodic no-stress test§  Consists of surveys with five to eightpeople from each company involvedin the collaboration§  Participants vary from directors tooperations§  Survey is done periodically, typicallyevery two months§  Survey questions are a subset of apredefined list, selected on the levelwhere participants are active on:strategic, tactical, operationalStrategical Tactical OperationalCommunications x x xOperating controls x xPlanning x xScope x xInvestment xContract style x xRisk/reward sharing x xTrust & commitment x x xAspectsLevels
    • Allianceexperts47High Trust = High Speed + Low CostLow Trust = Low Speed + High CostThe impact of trust
    • Allianceexperts48The value of trust§  Based on past experiences andsimilarities, you will trust a newperson to some extent§  Per situation you can make a riskassessment§  Based on the perceived risk, you willor will not take measures§  Based on the outcome the trust willincrease or decreaseTrustRiskassessmentMeasureOutcomeIntentionIntegrityCompetenceResultContractControlBudgetThreadPast experiences
    • Allianceexperts49Blind trust Smart trustDistrustNo trustLowHighHighLowLevel of proof and analysisBasicattitudetowardstrustBalance trust and control
    • Allianceexperts50ConclusionStrategic collaboration andpartnerships are a path to growth• Choose the type of partnershipsthat fit your growth strategy• Look for the right partner• Make expectations and obligationsclear and measurable• Monitor results• Balance trust and controlMore reading?www.allianceexperts.com/creatingprofit
    • Allianceexperts51Thank you for your attentionAlfred Griffioenfounding partner+31 6 2477 6865! Cervanteslaan 115, Utrecht " P.O. Box 10056, 3505 AB Utrecht, The Netherlands# 111 North Bridge Road, #05-32 Peninsula Plaza, Singapore 179098, Singapore$ alfred.griffioen@allianceexperts.comAlliance expertswww.allianceexperts.com