1. Forbes Marshall (FM) pursued strategic alliances over acquisitions due to the lower risk and capital requirements of alliances. Alliances allowed FM to gain access to new technologies and markets through partners while maintaining independence. 2. FM's alliances resulted in various synergies, including solutions synergies through combined steam and instrumentation expertise, R&D synergies through knowledge sharing, and sales synergies by adding new products. 3. FM developed strong alliance management capabilities such as partner selection, alliance governance, and post-formation management. This allowed them to successfully form and maintain partnerships over time to gain competitive advantages.

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Case Analysis Submission - 1
Alliance Management at Forbes Marshall
Corporate Strategy
Submitted to
Prof. Vijay V
Total Word Count – 808 words
Chaitanya Sharad Shinde 2111056
Gowtham D S 2111171
Shreyas S 2111058
Amrita Singh 2111059
Nitin Pagar xxxxxxxxxxxxxxx

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Forbes Marshall Background:
Steam engineering and control instrumentation are their two main specialties. With the knowledge and
technology that FM gained through alliances, it eventually transitioned itself from a sales and distribution
entity to a manufacturing and R&D firm.
The timeline of the journey is described as below
Why Alliances over Acquisitions?
Alliance Acquisitions
“Look before you Leap” - alliance provides
less riskier option in new markets
Riskier compared to Alliance
Easier to form an alliance based on
capabilities
Requires capital requirements for acquisitions
Difficult to manage partners – cost of
managing alliances
Control is acquired and hence no issue of
managing partners, however, cost of merger
still exists
Cultural fit sometimes may not be required Cultural fit is extremely important for a
merger to be successful
Less control and risk of break up, also
movement of Human Resources becomes
and issue dues to different priorities of
alliance and parent companies
Control is with the acquiring firm

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A strategic alliance enables businesses to combine their resources to compete more effectively. FM
maintained its individual entity while competing against rivals as a stronger, more cohesive commercial
force by - entering alliances.
In an acquisition, FM would’ve taken over rival business. Once entered they’re non-negotiable, non-
cooperative, and tougher to leave
Alliances are less hazardous than acquisitions. It allies two businesses with diverse capabilities to engage
on mutual initiatives benefitting both.
Reasons for FM entering into alliance:
In case of FM, due to its size(and hence its ability to generate capital) , its capabilities, risks involved with
uncertain environmental factors, etc. were the reasons why Alliance was more attractive option than
acquisitions
1. Increase market penetration
2. Obtain access to best-in-class technology
3. Economies of Learning
4. Product Innovations – Horizontal and Vertical
5. Positive synergies through cooperation
FM’s Corporate Strategy and its effectiveness:
● Achieving immediate market penetration by forming alliances with foreign companies and leverage
their best-in-class products & technologies
● They first focused on creating core competencies and cultivating customer relationships.
● Later, they concentrated on expanding their product offering by establishing more non-overlapping
agreements. Creating inter-departmental synergies for cost reduction, knowledge transfer, sales, and
marketing.
There is an overlap in the success criteria required for becoming a
successful family business and managing a JV:

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Synergies in FM across Alliances:
Strategic alliances can lead to operational synergies, increased new market opportunities, access to HR
capabilities, decreased competition and potential for higher profits to the parties
Solutions Synergies:
Expertise in both steam and control instrumentation by virtue of its various alliances with respective
industry pioneers. They also penetrated the waste fuel boiler segment market through Vyncke
Result: Developed industry specific solutions in energy efficiency and utility management
R&D Synergies:
Leverage knowledge gained from one alliance - in all of its group companies eg. Codel1 and Spirax2
Logistics Synergies:
FM leveraged opportunities to improve their logistics, by learning from its alliance partner e.g. Spirax3
Management Synergies:
Each JV was an independent business unit that was supported by common function e.g Spirax4
Synergy of Sales:
Up-sell/Cross-sell higher-priced technically superior products by entering to new markets and by adding
new products to FM portfolio. E.g., Vyncke5
Administration and HR Synergies: Core functions were there in each JV but support functions were
shared across group companies
1 FM gained a significant part of Codel's technological expertise from the JV with Codel, all while providing Codel with the improved opportunity
to economically conduct business in India.
2 The JV with Spirax allowed FM to gain access to Spirax's technology and to create a competitive advantage by producing products that would help
Indian companies save energy.
3 Spirax was particularly superior in the area of logistics while FM process in that area was inefficient.
4 FM replicated Spirax effective management control system to her other alliances. FM learned several operating principles and philosophies that it
implemented successfully across the group.
5 FM leveraged Vyncke's technology to establish a strong position in the waste fuel boiler segment. It also leveraged FM's strengths in technical
sales to sell a higher-priced but technically superior product in the Indian market

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FM’s Alliance Management Capabilities:
1. Partner selection & Alliance formation – utilizing their knowledge of managing alliance across regions
and product categories to endure and nurture the partnerships over time
2. Alliance design and governance - Building their ability to manage non-compete relationships and
sustainability. Thus, they fostered a competitive advantage at least in the Indian Market which can further
be leveraged in foreign geographies.
3. Post-formation Alliance management
4. Delegate dedicated functions in the Alliance - FM had complete control over operational activities
irrespective of the structure of the JV
5. FM’s Value-focused approach to managing alliances
6. The leadership and interpersonal skills of FM, that stemmed from the practices of FM, is important
for in house grooming program for management and leadership positions

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Bucketing the steps taken by FM into above capabilities:
Analyzing Alliance Fit
e.g.SPIRAL-MARSHALL
Benefit for Spirax = access to Indian market
Benefit for FM = access to Spirax’s technology
- Strategic Fit: Strong desire to cooperate to enter different markets
- Capabilities Fit: Provide better customized solutions as they have sales driven groups
- Cultural Fit: Corporate value to provide excellent product knowledge to customers, “selling
benefits” philosophy
- Organizational Fit: High degree of operational freedom based on trust and informality
Analysis: FM acquires stake in Codel instead of alliance
After two alliance failures6, the following characteristics of Codel provided an opportunity7
- Smaller than FM’s other alliance partners
- Quick integration and implementation of ideas using FM’s cutting-edge R&D
- Strong business strategy alignment
- Its products were a good fit with FM’s portfolio
FM invested in Codel to use the technology to sell items outside of India.
Way forward for FM:
Having done around 10 alliances with various partners, FM has to decide whether to go for new alliances.
New alliances will maximize value if it answers positively to the following questions. If not, FM can go with
the internal development route.
6 Ametek and Maihak
7 For entering Emission and Emission monitoring equipment.

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Meanwhile FM can explore these paths as well:
- Internally develop new products through extensive R&D
- providing services for conducting energy audits and process optimization to clients in other
countries
- Direct export of the most accurate vortex flowmeters
- Acquiring minority stakes in small engineering companies which have promising and
complementary products.