This document discusses the importance of strategic relationships between organizations. It notes that relationships can help address skill and resource gaps, environmental turbulence, and complex market and technology issues. The document examines how to choose the right partner by analyzing costs and benefits, cultural fit, and compatibility. It provides examples of different types of relationships like strategic alliances, joint ventures, and customer-supplier links. Finally, it outlines how to develop effective relationships through capabilities like planning, trust-building, evaluation metrics, and dedicated alliance teams.

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Strategic Marketing Session 6
Importance of Strategic Relationship
Lecturer: Anik Saha

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Rationale of Inter-Organizational Relationships
Value Enhancing
Opportunities
Skill & Resource
Gap
Environmental
Turbulence and
Diversity
2
• Couple competencies
to offer superior
customer value
• Offer flexibility as
value by modular
design
• Altering org structure &
Establishing strategic
relationship to counter
environmental diversity
• Teaming up to address
fragmented market &
complex technologies
• Strategic Alliance, JVs or
collaborations between
supplier->producer,
competitors or industry
members etc.
• To complement skill
& resource gap
• Faster go to market
strategy
• Develop
capabilities,
knowledge transfer
• Driven by
Complexity of tech,
Fin constraints,
access to market,
internet reach

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Explore The Potential for Collaborative Relationships
3
Strategic
Logic
Sharing Tech, Market
access, reduce time
to develop new prod
Promising Strategy Relationship Strategy
Choose Right Candidate Fitment to Culture
• Cost vs. Benefit analysis of partnering
with customers, suppliers & competitors
• Analyze investment required and plan
activities, participants etc.
• Driving project alone not feasible
• Equivalent Dependence exists
between orgs
• Find promising partner
- Non-interest or allied with
competition
• Alliance with weaker partner avoided
• Amalgamation of cultures
• Compatible business activities and priorities

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AT&T and British Telecom Breakup due to Cultural clash
http://www.forbes.com/2001/10/16/1016concert.html

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Types of Organizational Relationships
Customer-Supplier
Distribution-
Channel
End
User/Customer
Relationships
Strategic Alliances
Joint-Ventures
Internal Partnering
Types of Org.
Relationship
• Value added process through
vertical channels with func
specialization
• Wholesaler Retailer or Relatiler
to Customer
• Outsourcing of activities like
transportation, repair, maint
services, info systems, HR
• Expand functions without capex
• Vertical relation betn.
Producer and channel
• Manufacturer
Wholesaler Retailer
Customer
• To develop new mkt
oppty, to access intl. mkt,
to share cost & fin or to
acquire knowledge
• Creates a new firm
• Cross functional internal integration
• Helps collaboration and generate
new ideas, leverage mutual strength
• Drive pilot projects for new prods or
initiatives
• Drive customer focus culture
• Segment right set of customers
to be partners
• Leverage customer’s input for
tech enhancement as roadmap
• Customer guidance to explore
new areas of innovation
• Alliance & commitment to common
strategic goal
• Mutual Stakes or control decided
• Alliance in Mkt Coverage/ Mktg/ R&D/
Ops/ Financial relationships
• Share functional responsibilities/ Tech or
Business skills
• High dependency and lack of trust a
recipe for failure

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http://www.dnaindia.com/money/report-wipro-ge-to-integrate-healthcare-units-1294632

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Develop Effective Relationships
Partnership Capabilities
Objective of Relationship Relationship Management
Guidelines
Control & Evaluation
• Identify & Obtain New Tech & Competencies
• Develop New Market & Build Market Positions
• Market Selectivity
• Restructuring & Cost-Reduction
• Detailed Planning
• Trust & Self-Interest
• Conflicts
• Leadership Structure
• Flexibility
• Cultural Differences
• Tech. transfer
• Learning mutual strengths
• Derive formal evaluation process periodically
• Balanced Scorecard approach financial, customer,
employees & internal processes and leaning
• Usual business goals like Revenue/Profit/Cost
• Measurement metrics short term and long term
• Qualitative measures on trust, communications,
conflicts or cultural gaps (if any)
• Competence required to drive partnership
• Dedicated Strategic alliance team an option
• Build organizational competence
Critical at very early stage

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Acknowledgements:
• Strategic Marketing: Authors: David W. Cravens & Nigel F. Piercy