Cases in Alliance Management: Building Successful Alliances
Drawn from best practices, this casebook provides a practical road map and real-life case studies to help students develop the necessary skills to design, negotiate, and manage domestic and international alliances. Editors Jean-Louis Schaan and Micheál J. Kelly have organized this book around the four major phases in the alliance formation and management process—strategic rationale, partner selection, negotiation, and implementation.
- Front Matter
- Back Matter
- Chapter 1: Strategic Rationale: Should a Firm Build a Strategic Alliance?
- Cambridge Laboratories: Proteomics
- Fishery Products International Ltd.—A New Challenge
- NonStop Yacht, S.L.
- Strategic Direction at http://Quack.com (A)
- Pharma Technologies Inc.
- ALPES S.A.: A Joint Venture Proposal (A)
- Chapter 2: Selecting the Right Partner
- Ben & Jerry's—Japan
- Larson in Nigeria (Revised)
- Privatizing Poland's Telecom Industry: Opportunities and Challenges in the New Economy and E-Business
- Prosoft Systems Canada (A)
- Cameron Auto Parts (A)—Revised
- Chapter 3: Negotiating and Designing an Alliance
- Blue Ridge Spain
- TeqSwitch Inc.: Business in Buenos Aires
- Textron Ltd.
- Nora-Sakari: A Proposed JV in Malaysia (Revised)
- Majestica Hotel in Shanghai?
- Eli Lilly in India: Rethinking the Joint Venture Strategy
- Chapter 4: Implementing Winning Conditions
- Canadian Closures (A)
- Cameco in Kyrgyzstan: Corporate Social Responsibility Abroad
- Wil-Mor Technologies: Is there a Crisis?
- The Wuhan Erie Polymers Joint Venture
The Ivey Casebook Series: A SAGE Publications Series
Paul W. Beamish
Richard Ivey School of Business, The University of Western Ontario
Books in This Series
CASES IN ALLIANCE MANAGEMENT
Building Successful Alliances
Edited by Jean-Louis Schaan and Micheál J. Kelly
CASES IN BUSINESS ETHICS
Edited by David J. Sharp
CASES IN ENTREPRENEURSHIP
The Venture Creation Process
Edited by Eric A. Morse and Ronald K. Mitchell
CASES IN OPERATIONS MANAGEMENT
Building Customer Value Through World-Class Operations
Edited by Robert D. Klassen and Larry J. Menor
CASES IN ORGANIZATIONAL BEHAVIOR
Edited by Gerard H. Seijts
CASES IN THE ENVIRONMENT OF BUSINESS
Edited by David W. Conklin
MERGERS AND ACQUISITIONS
Text and Cases
Edited by Kevin K. Boeh and Paul W. Beamish
Copyright © 2007 by Sage Publications, Inc.
One-time permission to reproduce granted by Ivey Management Services on December 14, 2004.
The Ivey cases have been prepared solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of managerial situations. The authors do not intend to provide legal, tax, accounting, or other professional advice. Such advice should be obtained from a qualified professional. The authors may have disguised certain names and other identifying information to protect confidentiality.
Ivey Management Services prohibits any form of reproduction, storage, or transmittal without its written permission. Ivey case material is not covered under authorization from CanCopy or any reproduction rights organization. To order copies or request permission to reproduce Ivey materials, contact Ivey Publishing, Ivey Management Services, c/o Richard Ivey School of Business, The University of Western Ontario, London, Ontario, Canada, N6A 3K7; phone (519) 661–3208, fax (519) 661–3882, e-mail firstname.lastname@example.org
All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the publisher.
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Library of Congress Cataloging-in-Publication Data
Cases in alliance management : building successful alliances/Jean-Louis Schaan, Micheál J. Kelly.
Includes bibliographical references.
ISBN 1–4129–4029-X or 978–1–4129–4029–0 (pbk.)
1. Strategic alliances (Business) I. Kelly, Micheál J. II. Title.
This book is printed on acid-free paper.
06 07 08 09 10 10 9 8 7 6 5 4 3 2 1
Acquisitions Editor: Al Bruckner
Editorial Assistant: MaryAnn Vail
Production Editor: Libby Larson
Copy Editor: Gillian Dickens
Typesetter: C&M Digitals (P) Ltd.
Proofreader: Mary Meagher
Cover Designer: Candice Harman
Introduction to the Ivey Casebook Series[Page vii]
As the title of this series suggests, these books all draw from the Ivey Business School's case collection. Ivey has long had the world's second largest collection of decision-oriented, field-based business cases. Well more than a million copies of Ivey cases are studied every year. There are more than 2,000 cases in Ivey's current collection, with more than 6,000 in the total collection. Each year approximately 200 new titles are registered at Ivey Publishing (http://www.ivey.uwo.ca/cases), and a similar number are retired. Nearly all Ivey cases have teaching notes available to qualified instructors. The cases included in this volume are all from the current collection.
The vision for the series was a result of conversations I had with Sage's Senior Editor, Al Bruckner, starting in September 2002. Over the subsequent months, we were able to shape a model for the books in the series that we felt would meet a market need.
Each volume in the series contains text and cases. “Some” text was deemed essential in order to provide a basic overview of the particular field and to place the selected cases in an appropriate context. We made a conscious decision to not include hundreds of pages of text material in each volume in recognition of the fact that many professors prefer to supplement basic text material with readings or lectures customized to their interests and to those of their students.
The editors of the books in this series are all highly qualified experts in their respective fields. I was delighted when each agreed to prepare a volume. We very much welcome your comments on this casebook.Series Editor[Page viii]
Alliances have become an essential vehicle for firms around the world in their quest to sustain or improve their competitiveness.
The book is designed to respond to the growing need to train savvy alliance managers in business schools.
The text part of the casebook is a four-part series on building strategic alliances that work. The chapters are intended to help you understand the cornerstones of success to building a strategic alliance.
Each chapter concentrates on the central activities and issues surrounding a unique phase of the alliance process. These phases include: creating the strategic rationale for an alliance, selecting a partner, negotiating the deal, and implementing the relationship.
At the conclusion of each section, you will be provided a helpful set of diagnostic questions to aid you in determining a company's strength and suitability of achieving success through alliances. These tools can be a healthy way of reviewing the quality of an alliance, indicating where intervention may be required.Figure 0.1 The Partnering Process
The orientation of the book, through the text and the cases, is decidedly practical. Each chapter begins with an overview of central activities and issues surrounding a specific [Page x]phase of the alliance process. The overviews draw on state-of-the-art academic research about alliances and our own studies with executives involved in alliance management over more than a decade. They provide tools designed to help managerial decision making.
Each chapter includes a number of case studies that were selected to cover alliances in a variety of industry sectors and regions of the world. Because they are rich in content and integrate management issues as managers face them, a number of the cases could be used to illustrate phases of the alliance process other than the ones they were categorized under.
We wish to thank Paul Beamish, Director of Ivey Publishing, and Al Bruckner, Senior Editor at Sage, for their encouragement and support in this alliance. Our thanks to Ms. Andrie Nel, who edited our initial text and designed the summary flowcharts at the end of each chapter. We would like to extend our gratitude to our colleagues and case writers who produced the case materials. Finally, we would like to thank the executives who contributed the original insights, which shaped our own thinking about alliances.[Page xii][Page xiii]Introduction
Firms are looking to create and maintain a competitive edge in a business climate where the abilities to adapt and respond are critical to survival. Increasingly, this search involves radically rethinking traditional organizational boundaries and business models. Emerging models emphasize cooperative strategies and relationship-based organizational structures that are highly flexible, capable of responding to rapid and sometimes radical changes in the marketplace and technology.
It has been estimated that over the past decade, the rate of alliance formation has increased at a rate of 25% annually. Numerous studies in recent years involving different industries and countries have pointed to the importance of alliances in the competitive strategies of contemporary firms.
Despite the strategic and financial benefits, there is also a substantial body of evidence pointing to the difficulties that firms have in achieving their alliance objectives. It is clear that, when managed well, alliances can create tremendous value. If poorly managed, however, they can be very costly distractions wasting resources, destroying morale, and resulting in a loss of competitiveness. Studies have consistently shown that the wrong alliance can be a black hole for management time and resources.
Strategic alliances and alliance-based business models will play an increasingly important role in the competitive environment of the next decade and beyond. The ability to form, implement, and manage them successfully will become a key source of competitive advantage. Partnering, however, is not an exact science. There is no simple recipe or formula for what makes a successful relationship. Every alliance has its own idiosyncrasies, its own unique attributes and ingredients that arise from specific circumstances and people.
Given the importance that partnering will likely play in the future of any business, now is the time to start preparing by evaluating its partnering capabilities and assessing its partnering options.
This book is dedicated to our wives, Claudia and Marjolaine. We thank them for their love and their support.[Page xvi]
About the Editors[Page 319]
Jean-Louis Schaan, Ph.D., is Professor of Strategic Management and International Business and the J. Armand Bombardier Chair in Global Management at the Richard Ivey School of Business. Prior to joining Ivey, he was Director of the University of Ottawa's Executive MBA Program. He is a past winner of the University of Ottawa Award for Excellence in Teaching. His research has focused on strategic alliances and project management. In collaboration with Micheál Kelly, he has conducted studies about the management and implementation in strategic alliances in the high-technology sector. He has been serving in private company board of directors and advisory boards for 15 years, has consulted with public- and private-sector organizations in Canada and Europe, and taught in executive programs in North America, Europe, Asia, and North Africa.
Micheál J. Kelly, Ph.D., is Dean and Professor of Strategic and International Management at the University of Ottawa's School of Management. His research focuses on strategic alliances and venture capital financing of high-technology companies. He is the author of several dozen monographs, articles, and studies related to high-technology management and strategy issues.
Dr. Kelly is a former executive board member and chairman of the Six Countries Program, a European research network on innovation and technology policy. He is also a former board member of the Silicon Valley Roundtable. He is a featured speaker at international conferences and executive seminars on strategic alliances and venture capital and has contributed on both subjects to the National Post, CBC's Venture, and other major business media. He is a past president of the Canadian Federation of Business School Deans.[Page 320]