2. SELECT PREFERRED COURSE IDENTIFY AND SELECT PARTNER STRUCTURE AND NEGOTIATE DEAL PLAN IMPLEMEN- TATION EXECUTE STRATEGIC PLANNING ALLIANCE PLANNING AND EXECUTION 1 2 3 4 5 FRAMEWORK FOR NEGOTIATING, DEVELOPING AND MANAGING A STRATEGIC ALLIANCE The process consists of five phases:
8. WHAT IS STRATEGY? WHAT IS TACTICS ? Strategy is knowing what to do when there is nothing to do. Tactics is knowing what to do when there is something to do. Savielly Tarakover Polish Chess Grand Master
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11. Assessing the Competitive Environment Industry Structure – Porter’s Five Forces Potential Entrants Substitutes Customers Industry Competitors Suppliers
12. Assessing the Competitive Environment Industry Structure – Porter’s Five Forces Potential Entrants Substitutes Customers Industry Competitors Suppliers Globalization Trade Agreements Political Economy
13. Industry Structure – Porter’s Five Forces Potential Entrants Substitutes Customers Industry Competitors Suppliers Globalization Trade Agreements Political Economy
14. High VOLATILITY Low Low IMPACT ON BUSINESS High Industry Structure – Not All Forces are Equal Exit Globalization Suppliers Competition Example New Entrants Technology Product Substitution Customers Political Economy
15. Our Industry Clients’ served industries Our Suppliers’ Industries E Commerce Technology Must understand the structure of ALL industries that are your suppliers and/or your customers… now and future! Potential Competitors? Mostly outsiders looking in
20. CORPORATE EXPANSION MATRIX SAME BUSINESS NEW MARKETS IN NEW REGIONS VERTICAL INTEGRATION RELATED BUSINESS UNRELATED BUSINESS Mode Direction STRATEGIC PLANNING
21. CORPORATE EXPANSION MATRIX STRATEGIC PLANING SAME BUSINESS NEW MARKETS IN NEW REGIONS VERTICAL INTEGRATION RELATED BUSINESS UNRELATED BUSINESS CONSOLIDATION GLOBALIZATION COMPETITIVE STRATEGY SYNERGY CONGLOMERATE
22. INTERNAL DEVELOPMENT STRATEGIC ALLIANCES MERGERS AND ACQUISITION CORPORATE EXPANSION MATRIX STRATEGIC PLANNING SAME BUSINESS NEW MARKETS IN NEW REGIONS VERTICAL INTEGRATION RELATED BUSINESS UNRELATED BUSINESS CONSOLIDATION GLOBALIZATION COMPETITIVE STRATEGY SYNERGY CONGLOMERATE
23. SELECT THE PREFERRED COURSE STRATEGIC PLANNING Why is it important to select the right type of alternative?
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25. COMMITMENT No linkage Shared Resource Shared Funding Cross Equity Shared Equity Wholly Owned OWNERSHIP “ How do you successfully manage this new entity and maximize value creation for your shareholders?” STRATEGIC PLANNING SELECT THE PREFERRED COURSE Source: Booz Allen PERMANENT LONG TERM TRANSACTIONAL
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27. WHAT IS A STRATEGIC ALLIANCE? STRATEGIC PLANNING
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29. STRATEGIC PLANNING What are the advantages in forming strategic alliances? SELECT THE PREFERRED COURSE
30. STRATEGIC PLANNING ADVANTAGES IN FORMING STRATEGIC ALLIANCE 1. Offers multinational access to resources (e.g. products, technologies, personnel, market access) 2. Permits economies of scale through sharing or concentration of resources or facilities (e.g. manufacturing) across all alliance partners 3. Shares risk, such as in joint R&D programs that reduce the expenditure required by each firm individually 4. Blocks or co-opts competition (e.g. through defensive or offensive alliances) 5. Overcomes trade barriers (e.g. in developing countries or nationally protected industries)
31. STRATEGIC PLANNING What are the risks in forming strategic alliances? SELECT THE PREFERRED COURSE
32. 1. Creates a competitor, by transferring knowledge or market access to the partner 2. Inhibits integration of local operations into the global strategy, and limits internal development of key resources for global operations 3. Raises organizational and commercial risks (e.g. differences in culture may prove to be disruptive and costly; alliance may be detrimental for industry structure and profitability) 4. Reduces autonomy and strategic / competitive flexibility 5. Consumes significant proportion of management time and attention RISKS IN FORMING STRATEGIC ALLIANCES STRATEGIC PLANNING
34. STRATEGIC PLANNING How do you minimize the risk of failure? By addressing the two most frequent types of failure: 1. LOGIC … “It looked like a good idea, but it was not.” 2. PROCESS … “It was a good idea, but it did not work.” SELECT THE PREFERRED COURSE
35. SELECT PREFERRED COURSE IDENTIFY AND SELECT PARTNER STRUCTURE AND NEGOTIATE DEAL PLAN IMPLEMEN- TATION EXECUTE STRATEGIC PLANNING ALLIANCE PLANNING AND EXECUTION 1 2 3 4 5 FRAMEWORK FOR NEGOTIATING, DEVELOPING AND MANAGING A STRATEGIC ALLIANCE The process consists of five phases:
36. What would you look for in your partners? IDENTIFY & SELECT PARTNER
37. 1. COMPATIBILITY ...in strategic objectives,technology,values, management philosophies and beliefs 2. COMMITMENT ...to high safety, industrial hygiene, environmental and ethical standards. And, a long-term commitment to the relationship 3. TRUST ...in every aspect of the relationship. Trust must be balanced with self-interest. Know each other’s goals and be sure both can succeed 4. COMMUNICATION ...frequent, open and informal to avoid potential conflicts 5. ACTION ORIENTED ... nature of relationship requires prompt and decisive actions 6. STRONG REPUTATION ... solid corporate image, record, financial resources and strength IDENTIFY & SELECT PARTNER SIX GOLDEN RULES
38. Complementary Unrelated or Similar Resources, Technologies and staff Similar Different Cultures/Values Failure Success Failure Failure Based on our experience, strategic and cultural compatibility are critical for success IDENTIFY & SELECT PARTNER
41. National Professional Functional Company Industry Regional Geography, history, political and economic forces, climate, region, language Resources, technology, product market, regulation, competitive advantage Education, training, selection, socialization External environment, nature of task, time horizon Founder, leader, administrative heritage, nature of product/industry stage of development INTERACTING CULTURAL SPHERES Source: Adapted from J. Santos IDENTIFY & SELECT PARTNER
46. SELECTION OF PARTNER Country Clusters Source: S. Ronen and O. Shenkar (1965) “Clustering Countries on Attitudinal Dimensions”, Academy of Management Review, 10(3) Near Eastern Turkey Iran Greece Nordic Finland Norway Denmark Sweden Germanic Austria Germany Switzerland Anglo United States Australia Canada New Zealand Ireland United Kingdom South Africa Latin European France Belgium Italy Spain Portugal Latin American Chile Peru Argentina Venezuela Mexico Colombia Far Eastern Malaysia Hong Kong South Vietnam Singapore Philippines Indonesia Taiwan Thailand Arab Bahrain Abu Dhabi United Arab Emirates Kuwait Oman Saudi Arabia Independent Brazil Japan India Israel
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49. POWER DISTANCE - the extent to which a society accepts that power in institutions and organizations is distributed unequally. UNCERTAINTY AVOIDANCE - the extent to which a society feels threatened by uncertain or ambiguous situations. INDIVIDUALISM - a loosely knit social framework in a society in which people are supposed to take care of themselves and of their immediate families only. COLLECTIVISM - the opposite occurs when the people distinguish between in-groups and out-groups ; they expect their in-group to look after them in exchange for absolute loyalty . MASCULINITY with its opposed pole FEMININITY . This dimension express “the extent to which the dominant values in society are assertiveness, money and material things, not caring for others, quality of life and people ”. AND A FIFTH DIMENSION OF NATIONAL CULTURE
50. Source: G. Hofstede (1991) Cultures and Organizations Hofstede’s Maps SELECTION OF PARTNER
51. Low Formalization High Low Hierarchy High SELECTION OF PARTNER PREDOMINANT CULTURAL PROFILES Uncertainty Avoidance Power Distance Village Market (Anglo Nordic) Family or Tribe (Asian) Well-Oiled Machine (Germanic) Traditional Bureaucracy “ pyramid of people” (Latin)
52. Low Formalization High Low Hierarchy High SELECTION OF PARTNER PREDOMINANT CULTURAL PROFILES Uncertainty Avoidance Power Distance Decentralized Generalist People as free agents Flexibility More delegation Coordination thru Informal communication Output Control Decentralized decision making Narrow span of control Specialist/technical competence Discretion limited by expertise Strong role of “staff experts” Top management team Organized by functions Compartmentalized Coordination thru rules Structural solutions Throughput control/Efficiency Centralized Paternalistic Loyalty Generalist Strong social versus task roles Personal relationships Social control Centralized decision making Coordination at the top Less delegation “ Cloisonné” highly specialized Strong role of staff Analytical ability Pyramid of people Informal relationships “ Systeme D” Elitist( power and authority) Input control
53. SELECT PREFERRED COURSE IDENTIFY AND SELECT PARTNER STRUCTURE AND NEGOTIATE DEAL PLAN IMPLEMEN- TATION EXECUTE STRATEGIC PLANNING ALLIANCE PLANNING AND EXECUTION 1 2 3 4 5 FRAMEWORK FOR NEGOTIATING, DEVELOPING AND MANAGING A STRATEGIC ALLIANCE The process consists of five phases:
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57. High Conflict Potential Low Low Extent of Organizational Interaction High STRUCTURE & NEGOTIATE DEAL TYPOLOGY OF AN ALIANCE
58. High Conflict Potential Low Low Extent of Organizational Interaction High Pre Competitive Competitive Non Competitive Pro Competitive STRUCTURE & NEGOTIATE DEAL TYPOLOGY OF AN ALIANCE
59. PROTECTING MAJORITY AND MINORITY RIGHTS High Relative Fear Low Low Relative Expectations High Source: Mustafi, Mahajan & Dutla - Handbook of Business Strategy STRUCTURE & NEGOTIATE DEAL FEAR - EXPECTATION MATRIX
60. PROTECTING MAJORITY AND MINORITY RIGHTS High Relative Fear Low Low Relative Expectations High Preparing for divorce Courtship Honeymoon Maturity Source: Mustafi, Mahajan & Dutla - Handbook of Business Strategy STRUCTURE & NEGOTIATE DEAL FEAR - EXPECTATION MATRIX
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64. SELECT PREFERRED COURSE IDENTIFY AND SELECT PARTNER STRUCTURE AND NEGOTIATE DEAL PLAN IMPLEMEN- TATION EXECUTE STRATEGIC PLANNING ALLIANCE PLANNING AND EXECUTION 1 2 3 4 5 FRAMEWORK FOR NEGOTIATING, DEVELOPING AND MANAGING A STRATEGIC ALLIANCE The process consists of five phases:
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66. MINORITY INVESTMENT JOINT VENTURE ACQUISITION NOT ALL TYPES OF ALLIANCES CAN BE MANAGED THE SAME CONTROL STRATEGIC VALUE TIMEFRAME KEY SUCCESS FACTORS PLAN IMPLEMEN- TATION
67. CONTROL STRATEGIC VALUE TIMEFRAME KEY SUCCESS FACTORS MINORITY INVESTMENT MARGINAL NEGOTIATED TRACK NEW TECHNOLOGIES SHORT TERM STRUCTURE OF AGREEMENT JOINT VENTURE CONTRACTUAL, POTENTIALLY CONTENTIOUS DEVELOP NEW OPTIONS MEDIUM TERM MANAGING SHARED RESOURCES ACQUISITION EXCLUSIVE CAPITALIZE ON OPTIONS LONGER TERM MINIMIZING INTEGRATION COSTS PLAN IMPLEMEN- TATION NOT ALL TYPES OF ALLIANCES CAN BE MANAGED THE SAME
68. Excellent Poor Strategic Formulation [ Thinking ] Execution Strategic Formulation and Execution Matrix Value Creation Poor Excellent Value Destruction Red Zone Value Stabilization/ Erosion Value Stabilization/ Erosion Strategic Planning
69. Excellent Poor Strategic Formulation [ Thinking ] Execution Strategic Formulation and Execution Matrix Value Creation Poor Excellent Value Destruction Red Zone Value Stabilization/ Erosion Value Stabilization/ Erosion Strategic Planning
70. SELECT PREFERRED COURSE IDENTIFY AND SELECT PARTNER STRUCTURE AND NEGOTIATE DEAL PLAN IMPLEMEN- TATION EXECUTE STRATEGIC PLANNING ALLIANCE PLANNING AND EXECUTION 1 2 3 4 5 FRAMEWORK FOR NEGOTIATING, DEVELOPING AND MANAGING A STRATEGIC ALLIANCE The process consists of five phases:
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72. BUILDING BLOCKS FOR SUCCESSFUL STRATEGIC ALLIANCES SUMMARY LEADERSHIP CULTURE PEOPLE PERFORMANCE CONTINUOUS IMPROVEMENT Corporate Values - Clear strategic focus: Vision Visible senior management involvement Common set of objectives Assign your best people … drive process with passion Definition of success Adjust key metrics Create reward incentives Be flexible and adaptable + Learn from successes and failures Willingness to share knowledge Willingness to use others’ knowledge Willingness to accept risk + + = Right Partner/ Improved Performance
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Editor's Notes
GOOD EVENING AND THANKS FOR INVITING ME TO YOUR CLASS MY MAIN PURPOSES TODAY ARE : [1] TO SHARE WITH YOU A POSSIBLE APPROACH TO THE ESTABLISHMENT OF STRATEGIC ALLIANCES; AND [2] TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE ON THIS AND/OR RELATED TOPICS. -------------------------------------------------------------------------------------- IT SEEMS LIKE EVERYDAY …...EVERYBODY TALKS AND WRITES ABOUT STRATEGIC ALLIANCES . THESE TWO WORDS ARE PROBABLY AMONG THE TWO MOST MISUSED AND ABUSED…ALL UNDER THE BANNER OF “CREATING VALUE FOR THE SHAREHOLDERS” . BUT BEFORE WE GET INTO THE SPECIFICS I WOULD LIKE TO KNOW A LITTLE BIT ABOUT YOU : [1]Do you have any experience in establishing/managing alliances? [2]Do you have any experience in mergers and acquisitions [3]Have you lived or worked in a foreign country ..other than Miami ?
HOPEFULLY EVERYTHING WE DO IS DRIVEN BY A PROACTIVE STRATEGY…. I CANNOT EMPHASIZE ENOUGH THE IMPORTANCE OF “GOOD STRATEGIC THINKING PROCESS AND CULTURE” AS PART OF THE STRATEGIC PLANNING CYCLE. BUT EQUALLY IMPORTANT IS “ EXECUTION” . SO LET’S SPEND A FEW MINUTES REVIEWING SOME BASIC CONCEPTS . LET’S START WITH STRATEGY AND TACTICS .
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED WITH PASSION ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
BUSINESSES TODAY ARE CONFRONTED WITH A HIGHER DEGREE OF COMPLEXITY BROUGHT ABOUT BY GLOBALIZATION, NEW TECHNOLOGIES, RAPIDLY SHIFTING CONDITIONS IN THE MARKET PLACE, AND COMPETITION ARISING FROM UNEXPECTED SOURCES. FOCUS ON CORE CAPABILITIES IS NOT ENOUGH…CONTINUOUS IMPROVEMENT IS NOT ENOUGH….CREATIVITY IS WHAT MATTERS THE MOST STRENGTHEN THE CORE REINVENT THE CORE EXPAND BEYOND THE CORE
MOST OF THE THINGS THAT WE APPLY AS ADULTS ..ARE THINGS THAT WE LEARNED DURING OUR CHILDHOOD…AND THIS IS AN EXCELLENT EXAMPLE……. WHEN YOU DO NOT KNOW WHERE YOU ARE GOING ALL ROADS WILL TAKE YOU THERE….. YOU ONLY NEED TO WAIT LONG ENOUGH…. EFFECTIVE STRATEGY IS DYNAMIC….IT IS NOT CASTED IN CONCRETE…..YOU NEED TO ADJUST IT IN RESPONSE TO THE ENVIRONMENTS - INTERNALLY AND EXTERNALLY- BUT YOU NEED TO KNOW WHERE YOU ARE HEADING…AT LEAST DIRECTIONALLY….
IS STRATEGY AN ART OR SCIENCE ? IS TACTICS AN ART OR SCIENCE ? AND I WOULD ADD THAT IS NOT ONLY KNOWING WHAT TO DO…...BUT DOING IT WELL . EXECUTION IS THE NAME OF THE GAME .
IN ORDER TO SELECT THE PREFERRED ALTERNATIVE YOU NEED TO : [1] HAVE A CLEAR VISION AND A WELL ARTICULATED SET OF GOALS [2] UNDERSTAND THE STRUCTURE OF YOUR INDUSTRY AS WELL AS THE VALUE CHAIN SUPPLIERS COMPETITORS CUSTOMERS TECHNOLOGIES DYNAMICS- ENTRY AND EXIT BARRIERS [3] WHAT ARE THE CLEAR THREATS THAT YOU SEE THAT YOU IGNORE TO ACKNOWLEDGE ? [4] EXPANSION OPPORTUNITIES ? +MODE +DIRECTION
IN ORDER TO SELECT THE PREFERRED ALTERNATIVE YOU NEED TO : [1] HAVE A CLEAR VISION AND A WELL ARTICULATED SET OF GOALS [2] UNDERSTAND THE STRUCTURE OF YOUR INDUSTRY AS WELL AS THE VALUE CHAIN SUPPLIERS COMPETITORS CUSTOMERS TECHNOLOGIES DYNAMICS- ENTRY AND EXIT BARRIERS [3] WHAT ARE THE CLEAR THREATS THAT YOU SEE THAT YOU IGNORE TO ACKNOWLEDGE ? [4] EXPANSION OPPORTUNITIES ? +MODE +DIRECTION
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
HOPEFULLY EVERYTHING WE DO IS DRIVEN BY A PROACTIVE STRATEGY…. I CANNOT EMPHASIZE ENOUGH THE IMPORTANCE OF “GOOD STRATEGIC THINKING PROCESS AND CULTURE” AS PART OF THE STRATEGIC PLANNING CYCLE. BUT EQUALLY IMPORTANT IS “ EXECUTION” . SO LET’S SPEND A FEW MINUTES REVIEWING SOME BASIC CONCEPTS . LET’S START WITH STRATEGY AND TACTICS .
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
LET’S CONCENTRATE ON THE LAST BULLET… KEY IS TO SECURE COMPETITIVE ADVANTAGE.. AND BY THAT WE MEAN : [1]UNIQUE…NOT EASY TO BE COPIED [2]2 TO 3 YEARS GAP [3]ADOPTED PASSIONATEDLY ACROSS THE ORGANIZATION ------------------------------------------------------------------------------------- FORMULATION OF STRATEGY IS A CRITICAL COMPONENT OF YOUR PLANNING PROCESS……. WHY IS IT IMPORTANT ?
IN ORDER TO SELECT THE PREFERRED ALTERNATIVE YOU NEED TO : [1] HAVE A CLEAR VISION AND A WELL ARTICULATED SET OF GOALS [2] UNDERSTAND THE STRUCTURE OF YOUR INDUSTRY AS WELL AS THE VALUE CHAIN SUPPLIERS COMPETITORS CUSTOMERS TECHNOLOGIES DYNAMICS- ENTRY AND EXIT BARRIERS [3] WHAT ARE THE CLEAR THREATS THAT YOU SEE THAT YOU IGNORE TO ACKNOWLEDGE ? [4] EXPANSION OPPORTUNITIES ? +MODE +DIRECTION
TWO REASONS : [1] CONTROL/COMMITMENT INVESTMENT [2] RATE OF FAILURE STRATEGIC ALLIANCES ARE MORE COMPLEX TO NEGOTIATE….BUSINESS FIT AND IMPLEMENTATION ISSUES
TWO REASONS……CONTROL AND COMMITMENT…AND INVESTMENT STRATEGIC ALLIANCES ARE MORE DIFFICULT TO NEGOTIATE BECAUSE OF BUSINESS FIT AND IMPLEMENTATION ISSUES
TRANSACTIONAL ALLIANCES UNDER 5 YEARS MORE THAN 5 YEARS DOES NOT INVOLVE CONTROL..USUALLY CONTRACT DRIVEN LINKAGE BASED ON EQUITY AND SHARED CAPABILITIES PARTNERS DO NOT SHARE ATRATEGIC VISION RECIPROCAL VISION
MURPHY IS ALWAYS RIGHT…PLAN FOR THE UNEXPECTED! PLAN FOR THE REACTION OF CUSTOMERS,COMPETITORS,SUPPLIERS,INVESTMENT COMMUNITY ETC WHEN LOOKING AT COMPETITORS : + DOMINANT +TRADITIONAL +INNOVATORS USE AIRLINES EXAMPLE NEED TO FULLY ASSESS THE RISKS….
IN ESSENCE…ALL ALLIANCES ARE STRATEGIC BY DEFINITION
REMEMBER……OVER 50 % END UP FAILING
THIS TAKES US TO THE PLANNING AND EXECUTION PHASE
AS WE LOOK AT CULTURE THERE ARE AT LEAST SIX INTERACTING SPHERES…..AND THESE - INDIVIDUALLY AND COLLECTIVELLY HAVE A TREMENDOUS IMPACTON HOW WE COMPETE AND BEHAVE AS INDIVIDUALS AND ORGANIZATIONS
HOW COMPATIBLE ARE WE WITH OUR POTENTIAL PARTNERS? WHAT ARE THE REAL VERSUS THE PERCEIVED INCOMPATIBILITIES ? LET ME TAKE YOU THROUGH AN EXAMPLE.
ANY OF YOU HAVE EXPERIENCE DEALING IN ASIA ? NE ASIA? SE ASIA?
PRETTY GOOD LIST….. IF WE STOP HERE IT WILL PROBABLY MAKE LITTLE DIFFERENCE FROM THE CULTURAL POINT OF VIEW TO ESTABLISH AN ALLIANCE WITH A KOREAN OR AN INDONESIAN COMPANY…… BUT LET’S LOOK AT THE DIFFERENCES
A LOT OF WORK HAS BEEN DONE IN THE AREA OF CULTURE AND THE RESULTS ARE NOT COMPLETELY SURPRISING ELEMENTS THAT CUT ACROSS NATIONAL BOUNDARIES: GEOGRAPHICAL HISTORICAL LINGUISTICS RELIGION IF YOU LOOK CLOSER……SHARED LINGUISTICS AND COLONIAL HERITAGE
A LOT OF WORK HAS BEEN DONE IN THE AREA OF CULTURE AND THE RESULTS ARE NOT COMPLETELY SURPRISING ELEMENTS THAT CUT ACROSS NATIONAL BOUNDARIES: GEOGRAPHICAL HISTORICAL LINGUISTICS RELIGION IF YOU LOOK CLOSER……SHARED LINGUISTICS AND COLONIAL HERITAGE
GEERT HOFSTEDE IS AN EUROPEAN WHO HAS HELPED IDENTIFY IMPORTANT DIMENSIONS OF NATIONAL CHARACTER . FOUR DIMENSIONS OF NATIONAL CULTURE : POWER DISTANCE -the extent to which a society accepts that power in institutions and organizations is distributed unequally. UNCERTAINTY AVOIDANCE- the extent to which a society feels threatened by uncertain or ambiguous situations. INDIVIDUALISM-a loosely knit social framework in a society in which people are supposed to take care of themselves and of their immediate families only. COLLECTIVISM- the opposite occurs when the people distinguish between in-groups and out-groups ; they expect their in-group to look after them in exchange for absolute loyalty . MASCULINITY with its opposed pole FEMININITY . This dimension express “the extent to which the dominant values in society are assertiveness,money and material things, not caring for others,quality of life and people”. AGAIN,THE RESULTS SHOULD NOT COME AS A TOTAL SURPRISE
KEY DEFINITIONS : SYSTEM D : “WORKING AROUND THE SYSTEM “ CLOISONNE : “ HIGHLY COMPARTMENTALIZED..VERTICALLY AND HORIZONTALLY
NOW THAT WE HAVE A POTENTIAL PARTNER….WE NEED TO STRUCTURE AND NEGOTIATE A DEAL……
THIS IS ALSO AN INTERESTING AND CRITICAL PART OF THE PROCESS WHO IS GOING TO DO WHAT TO WHOM…WHEN…HOW… AND THIS BECOMES MORE CRITICAL IF THE ALLIANCE IS WITH AN EXISTING OR PROSPECTIVE COMPETITOR ,CUSTOMER OR SUPPLIER HOW ARE WE GOING TO DEFINE SUCCESS….SUCCESS MEANS DIFFERENT THINGS TO DIFFERENT PEOPLE WHAT ARE WE GOING TO MEASURE ? ……….BE AS SPECIFIC AS YOU CAN
MANY DEALS ARE PREDICATED ON ACHIEVING “ SIGNIFICANT SYNERGIES “…. MAKE SURE YOU HAVE A CLEAR UNDERSTANDING OF WHAT THOSE ARE….HOW ARE YOU GOING TO ACHIEVE ? WHO CONTRIBUTES WHAT ? BE CAREFUL….BECAUSE TENDENCY IS TO OVERESTIMATE ….AND CONSEQUENTLY OVERVALUE ------------------------------------------------------------------------------------------------------------------------------- YOU MUST ANTICIPATE YOUR CUSTOMERS AND COMPETITORS’ REACTION….AND THE FINANCIAL IMPACTS FROM THE MANY SCENARIOS ---------------------------------------------------------------------------------------------------------------------------- NEGOTIATIONS ARE TIME CONSUMING ….AND THIS FLUCTUATES FROM CULTURE TO CULTURE….BE READY AND UNDERSTAND YOUR COUNTERPART ------------------------------------------------------------------------------------------------------------------------------------------------ THERE IS MORE TO COME ON THE LAST TWO BULLETS …..DUE DILIGENCE AND PROTECTING RIGHTS
CONFLICT RESOLUTION SHOULD NOT BE TAKEN SUPERFICIALLY YOU CERTATINLY WANT TO MINIMIZE CONFLICT…..AND MAXIMIZE VALUE CREATION……
RECENT CORPORATE FIASCOS….
ASSIGN YOUR BEST PEOPLE DON’T ASSIGN YOUR DEAD WOOD SHOW PASSION AND COMMITMENT BE SPECIFIC LOOK FOR EARLY SUCCESSES
EXCELLENT –POOR …………………………PROBLEM IS IMPLEMENTATION BUT MANAGEMENT QUESTIONS THE STRATEGY SOME INNOVATION FRUSTRATED LEADERSHIP MEETS CUSTOMERS NEEDS LOSS OF VIABILITY POOR- EXCELLENT………………………………STRONG CORE BEST COST PRODUCER NOT ENOUGH INNOVATION LOSS OF VIABILITY POOR- POOR……………………………………QUICK FAILURE EXCELLENT-EXCELLENT………………….BEST IN CLASS INDUSTRY LEADERSHIP CUSTOMER LOYALTY CREATIVITY AND INNOVATION RED ZONE……………………………………….BET THE COMPANY STRATEGY
EXCELLENT –POOR …………………………PROBLEM IS IMPLEMENTATION BUT MANAGEMENT QUESTIONS THE STRATEGY SOME INNOVATION FRUSTRATED LEADERSHIP MEETS CUSTOMERS NEEDS LOSS OF VIABILITY POOR- EXCELLENT………………………………STRONG CORE BEST COST PRODUCER NOT ENOUGH INNOVATION LOSS OF VIABILITY POOR- POOR……………………………………QUICK FAILURE EXCELLENT-EXCELLENT………………….BEST IN CLASS..SUCCESS / BENEFITS ARE ACHIEVED INDUSTRY LEADERSHIP CUSTOMER LOYALTY CREATIVITY AND INNOVATION RED ZONE……………………………………….BET THE COMPANY STRATEGY
GOOD EVENING AND THANKS FOR INVITING ME TO YOUR CLASS MY MAIN PURPOSES TODAY ARE : [1] TO SHARE WITH YOU A POSSIBLE APPROACH TO THE ESTABLISHMENT OF STRATEGIC ALLIANCES; AND [2] TO ANSWER ANY QUESTIONS THAT YOU MAY HAVE ON THIS AND/OR RELATED TOPICS. -------------------------------------------------------------------------------------- IT SEEMS LIKE EVERYDAY …...EVERYBODY TALKS AND WRITES ABOUT STRATEGIC ALLIANCES . THESE TWO WORDS ARE PROBABLY AMONG THE TWO MOST MISUSED AND ABUSED…ALL UNDER THE BANNER OF “CREATING VALUE FOR THE SHAREHOLDERS” . BUT BEFORE WE GET INTO THE SPECIFICS I WOULD LIKE TO KNOW A LITTLE BIT ABOUT YOU : [1]Do you have any experience in establishing/managing alliances? [2]Do you have any experience in mergers and acquisitions [3]Have you lived or worked in a foreign country ..other than Miami ?
![[object Object],[object Object],University of Miami Graduate Program School of Business Administration](https://image.slidesharecdn.com/strategicalliancesapractitionersapproach-12665287058023-phpapp02/85/strategic-alliances-a-practitioners-approach-1-320.jpg)
