Partnership & allience


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how a strategic partnership form , what is partnership and what is alliences , the collaborative advantege , kentres 8 criterias for succesfull partnership etc...!!!

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Partnership & allience

  2. 2. Contents… <ul><li>Introduction …? ?? </li></ul><ul><li>What is partnerships & Alliance ??? </li></ul><ul><li>Why do people join partnerships ???? </li></ul><ul><li>Collaborative advantage. </li></ul><ul><li>Kentres EIGHT criteria’s for successful partnerships . </li></ul><ul><li>Process methodology. </li></ul><ul><li>Interference indicator. </li></ul><ul><li>Interdependence Assessment </li></ul><ul><li>Strategic Partnership Methodology. </li></ul>
  3. 3. INTRODUCTION <ul><li>Decision concerning the selection of channel intermediaries, and the subsequent working with this is effectively forming a strategic partnership. </li></ul><ul><li>As the business is modernized, and there is no monopoly so now it is extremely difficult to rum business by the single person therefore the partnership concept is said to occur. </li></ul><ul><li>In strategic partnership and alliances the emphasis is on cooperation & partnership b/w the parties, not competition & conflict as the basis upon which the joint competitive advantage is developed. </li></ul>
  4. 4. WHAT IS PARTNERSHIP & ALLIENCE ????? <ul><li>The partnership & alliance use as interchange but in raw sense both give the almost same meanings. </li></ul><ul><li>But there is difference b/w partnership & alliance and this difference come in relationship among people. </li></ul><ul><li>The vertical relation between supplier and customer / buyer are known as the PARTNERSHIP. </li></ul><ul><li>The horizontal relationships such as those b/w two suppliers are known as known as ALLIENCE. </li></ul>
  5. 5. <ul><li>Market </li></ul>GRAPHICALLY ALLIENCE + + + + + + + Strategy Culture Leadership Style + Supplier Supplier HORIZAONTAL
  6. 6. <ul><li>Market </li></ul>GRAPHICALLY PARTNRESHIP + + + + + + + Strategy Culture + Supplier Customer/ Buyer VERTICAL Leadership style
  7. 7. COLLABORATIVE ADVANTAGE <ul><li>Alliance b/w companies, whether they are from different parts of the world or different ends of the supply chain, are a fact of life in business today. Whatever the duration & objectives of business alliance, being a good partner has become a key corporate as s ets. I call it a company’s COLLABORATIVE ADVATNGE. </li></ul><ul><li>KENTRE reports on research project based on 37 companies & their partners from 11 countries of both manufacturing & service industires. </li></ul><ul><li>KENTRE give three fundametal concept ,….. </li></ul>
  8. 8. COLLABORATIVE ADVANTAGE continue ………. <ul><li>FUNDAMENTAL’S OF COLLABORATIVE ADVANTAGE ….. </li></ul><ul><li>1) Immediate short term benefits for the partners but also extends into the future. </li></ul><ul><li>2) successful arrangement involve collaboration rather than just exchange. </li></ul><ul><li>3) Relationship cannot be controlled by formal system but requires interpersonal connection. </li></ul>
  9. 9. KENTRE’S EIGHT CRITERIA …. <ul><li>Kentre suggest there are eight criteria which are necessary for organizational relationships………… </li></ul>CRITERIA NO. 1 : INDIVIDUAL EXCELLENCE Both partners require to be strong and can contribute something of value to the relationship. Both have the positive motive and attitudes. CRITERIA NO. 2 : IMPORTANCE The relationship should be congruent ( similar ) with the strategic objectives of both partners.
  10. 10. KENTRE’S EIGHT CRITERIA …. CRITERIA NO. 3 : INTERDEPENDENCE There should be mutual need of each partner; they ideally have complementary assets and skills. CRITERIA NO. 4 : INVESTMENT If each invests in the other, this signifies their respective stake in the relationship and commitment to the long term prosperity of the venture. CRITERIA NO. 5 : INFORMATION Shared information is an essential feature of the success of partnerships. Information concerned their specific, individual, objectives and goals as well as technical data, performance data and information concerning changed circumstances.
  11. 11. KENTRE’S EIGHT CRITERIA …. CRITERIA NO. 6 : INTEGRATION In which partners develop linkages and shared ways of operating to facilitate their working together easily. Connections are formed between the organizations at various (but important ) levels. CRITERIA NO. 7 : INSTITUTIONALIZATION Whereby the relationship is formalized, with clear responsibility and decision process. It thereby extends beyond the originators. CRITERIA NO. 8 : INTEGRITY It exist and the partners behave towards each other in ways which justify, and enhance, mutual trust; they do not abuse the confidence they are privy to, nor do they undermine each other.
  12. 12. PROCESS MATHODOLOGY <ul><li>Any company considering strategic partnership should do so only after an analysis of what is sees as its critical strategic issues and how these may be resolved. </li></ul><ul><li>Critical issues should first be identified and then prioritized by their likely impact ( low, significant, to high) and their urgency ( from low (long term), significant (medium term), to pressing (short term)- the length of time is dependent upon planning cycles. </li></ul><ul><li>Having completed this part of the analysis, the next step is to re-evaluate the critical issues by reviewing them alongside a prospective partner ( or partners) to ascertain the impact of partnership on the issues. </li></ul><ul><li>Criteria will be required and these should include revenue growth, profit growth, operating margins, cash generation and return to the share holders. </li></ul>
  13. 13. INTERDEPENDENCE INDICATOR <ul><li>% of supplier’s business this buyer represents. </li></ul><ul><li>Impact of business lost. </li></ul><ul><li>Strategic significance of business. </li></ul><ul><li>Number of direct competitors. </li></ul><ul><li>Degree of differentiation of product/ service. </li></ul><ul><li>Price advantage / disadvantage in relation to competitors. </li></ul><ul><li>% of business involved. </li></ul><ul><li>Level of risk supplier fails. </li></ul><ul><li>Cost of changing suppliers (“exit-cost:”). </li></ul><ul><li>Availability of alternative suppliers. </li></ul><ul><li>Strategic signifance of business. </li></ul><ul><li>This supplier annual cost versus all suppliers. </li></ul><ul><li>Total category cost as a proportion of sales ( e.g distribution / cost / sales). </li></ul>SUPPLIER BUYERS
  15. 15. RELATIONSHIP <ul><li>Buyer- high </li></ul><ul><li>dependence </li></ul>LEVEL – 1 STRATEGIC RESPONSE Supplier - high dependence <ul><li>A common strategy aligned to end user </li></ul><ul><li>(buyer’s customer) </li></ul><ul><li>A partnership culture aligned to end user. </li></ul><ul><li>Business plan for partnership </li></ul><ul><li>Structured communication framework </li></ul><ul><li>Integrated information </li></ul><ul><li>Open book negotiations </li></ul><ul><li>Interchanging personnel </li></ul><ul><li>Long term contracts. </li></ul>APPROPRIATENESS OF STRATEGIC ALLIENCE
  16. 16. RELATIONSHIP <ul><li>Buyer- low </li></ul><ul><li>dependence </li></ul>LEVEL – 2 STRATEGIC RESPONSE Supplier - high dependence <ul><li>Seller develops a strategy aligned to the culture of the buyer </li></ul><ul><li>Subculture un the seller to minor that un buyer. </li></ul><ul><li>Regular feedback system seller to buyer versus two-way communication. </li></ul><ul><li>Seller’s strategy includes differentiation to build dependence. </li></ul><ul><li>Contract term- from seller’s view, as long as possible </li></ul>APPROPRIATENESS OF STRATEGIC ALLIENCE
  17. 17. RELATIONSHIP <ul><li>Buyer- high </li></ul><ul><li>dependence </li></ul>LEVEL – 3 STRATEGIC RESPONSE Supplier - low dependence <ul><li>Seller strategy focused on synergy with other business. </li></ul><ul><li>Buyer strategy aims at exclusively agreements and contingency. </li></ul><ul><li>Seller recognizes buyer logics but does not necessarily change culture. </li></ul><ul><li>Pricing should reflect imbalance </li></ul>APPROPRIATENESS OF STRATEGIC ALLIENCE
  18. 18. RELATIONSHIP <ul><li>Buyer- low </li></ul><ul><li>dependence </li></ul>LEVEL – 4 STRATEGIC RESPONSE Supplier - low dependence STRATEGIC PARTNERSHIP NOT APPROPRIATE APPROPRIATENESS OF STRATEGIC ALLIENCE
  20. 20. COMPANY A JOIN (ENVIRONMENTAL SCAN) COMPANY B Flush out and list CRITICAL ISSUES COMPANY B COMPANY A STEPS MODULES 1. Vision Formulation 2. Looking external / internal 4. Issues Listing & Issues Articulation 3. Issues Formulation 1 . 2 . 5 . 6 . 9 . 10 .
  21. 21. ISSUE OBJECTIVE URGENCY IMPACT (Why Test ) (Quantify ) Strategies STEPS 6. Issue break Out objectives/ strategies/ action plans 5. Issues priori tization MODULES . . . . . Press . . . Sig . low High Sig low
  22. 22. Thank You