||Focus: Alliance Constellations
This is our second idea-letter, in which we focus on a key concept in
alliance strategy that is useful in practice.
In the last issue, we focused on the alliance option -- the choice of whether
and how to form a partnership. In this issue we consider the alliance constellation --
the network of partnerships that are often key to implementing a complex business
strategy. A constellation of alliances may help you introduce new products to
the market, or build economies of scale and scope, or create new barriers to
But all to often, alliance constellations grow haphazardly, as one deal follows
another. The result can be chaos and entanglement, not synergy. We show you how
to think hard about the alliance constellation before you leap and then how to
manage your multiple relationships.
When Google acquired YouTube, a group of traditional media companies created
a constellation to develop their own online video system. What challenges lay
ahead for them? Read our commentary
in the press here, or see a TV
clip about the NBC-Fox constellation.
||Article: Synergy, not Chaos
In many businesses, alliances between firms are reshaping competition. Instead
of firm versus firm, the battle is often one of group verus group.
Take the case of airlines: Star, Oneworld, and Sky Team are constellations of
allied firms that compete against each other. There are other examples in automobiles,
telecoms, multimedia entertainment, and elsewhere.
Indeed, constellation strategy is becoming the acid test for winning in complex
and fast-paced global businesses.
When firms are engaged in this kind of collective competition, what will determine
their success? How should this kind of network competition be managed?
more about constellation strategy . . .
about alliance strategy more generally . . .
||Video: Strategy and Structure
Winning with an alliance constellation requires sharp strategic thinking and
careful management of your portfolio of relationships. Many companies have failed
at this, but the successful ones teach us lessons about how to proceed.
The key is to step outside yourself: understand what each partner brings to the
group, and create a structure that maximizes cooperation.
perspective in this video (Flash) . . .
||Book: The Alliance Revolution
History often provides a useful perspective. Think about the constellation
of IBM, Microsoft, and Intel defeated Apple in personal computing. Or how the
VHS video constellation defeated Sony's Betamax.
Our first book was an in-depth study of the rise and role of alliance constellations
in high-technology industries. Prof. Rosabeth Moss Kanter of Havard Business
School and author of Thriving Locally in the Global Economy reviewed the
"The rich high-tech cases and thoughtful analysis in The Alliance
Revolution shed powerful light on global business competition. Gomes-Casseres
is among the first to show how strategic alliances change industry structure--a
lasting contribution to applied economics and business strategy that will also
be of value to managers and consultants."
and cases from this book summarized here (PDF) . . .
||Theory: Rethinking Strategy
As alliances transform business competition, they force us to change the way
we think about business rivalry and competitive advantage. The battlefield
is changing fast -- don't get stuck with an old mindset. We review the scholarly
literature and develop a new analytical framework in this chapter from the Handbook
of Strategic Alliances.
analytical framework is here (PDF) . . .
AllianceStrategy.com offers ideas, advice, and resources
for alliance strategy and management.
This letter is presented by Ben Gomes-Casseres, author of The Alliance Revolution and Mastering
Alliance Strategy, a professor at Brandeis University, and the principal
of Alliance Strategy Consulting. The website is free and has been offering resources
to the alliance community for over a decade.
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