Developing a practical approach to identify, select, design and manage strategic alliances

Scholtz, Johan F. (2002-12)

Thesis (MBA)--Stellenbosch University, 2002.

Thesis

ENGLISH ABSTRACT: This Study Project attempted to understand and analyse the key elements of strategic alliances in order to develop a practical model and structured approach for business to successfully justify, identify, assess, select, implement and manage alliances that will create maximum value for all parties involved and enhance the likelihood of alliance success. The objective was to obtain an end-ta-end and integrated picture of how to successfully apply strategic alliance as a business tool in today's dynamic and challenging business environment. The study showed that companies of today are facing an overwhelming number of external and internal challenges and pressures. These challenges are putting increased pressure on companies' resources, skills, management and other capabilities to develop new strengths and deliver products and services quicker and at a lower cost. Traditional methods of addressing these challenges, such as internal resource development or acquisition of a business that possesses the required capabilities, are proving to be inadequate and often force companies to sacrifice essential elements such as: speed to market, organisational agility and control. Strategic alliances offer an alternative. Strategic alliances can offer significant advantages for companies who are lacking in particular competencies or resources by securing these through links with partners who possess complementary skills or assets and may also offer easier access to new markets and opportunities for mutual synergy and learning. Alliances will avoid the permanency of strategies such as mergers and acquisitions and enable two-directional exchange of resources and competencies as apposed to the pure financial nature of outsourcing. The first step in the alliance process is the formulation of the alliance strategy. The alliance strategy will dictate which partner and alliance form is most appropriate, what the company expects to get out of the alliance and how risks will be managed. The alliance strategy is a building block or extension of the corporate strategy and must be aligned with the mission, goals and objectives that were set by the strategic process. The formulation of the alliance strategy must be based on an analysis of the external market circumstances and the company's internal resources and competitive capabilities. By defining an alliance strategy the company ensures that all alliances-related activities are consistent and structured. Once the strategic alliance strategy, objectives and format has been determined the company can start to identify and select a partner that has got the ability and competency that is required by the alliance and at the same time has got a similar need to be involved in the alliance. Partner selection requires a structured process to ensure that the alliance strategy and selected form is translated into and represented by key business attributes or areas that are affected by the alliance. The organisation must be clear about what its strategic objectives are and what the partner profile is it is looking for. These objectives are linked to criteria or requirements that the potential partner must comply to, in order to meet the alliance objectives. The partners are now ready to determine how each organisation will engage with the other to reach common objectives of the alliance. This is achieved through a process of negotiation and work definition. The negotiation is 'non zero-sum based' which means that one company's gain is not at the loss of the other company. The alliance business plan is developed during this stage and acts as the blueprint of the future alliance operations. During this stage it is crucial that the leadership of the two companies is actively involved and visible in the process. Managing strategic alliances introduces a complex combination of new management challenges that often need to be coordinated and addressed. It is the alliance management's responsibility to establish a relationship of trust between the companies, address cultural issues and ensure that there is a continuous process of two-way learning. These solutions and the original alliance agreement will however be temporary because the alliance is founded upon relationships that have a dynamic of their own and are subject to the influence of external changes bearing on the alliance, which requires that the alliance needs to transform and adapt to these changes on a regular basis. Strategic alliances are certainly not a new concept in South Africa. But the adoption rate of strategic alliances seem to be slow compared to world standards and opportunities for both local and international alliances have not been capitalised on. Alliances can enable South African companies to remove unnecessary duplication between companies, access international skills and technology, build on synergies and reach global markets in a cost effective and swift way.

AFRIKAANSE OPSOMMING:Die doel van hierdie Studie Projek was om die sleutelkomponente van strategiese alliansies te ontleed en te verstaan om sodoende 'n praktiese model en gestruktureerde benadering vir besigheid te ontwikkel om alliansies suksesvol te kan regverdig, identifiseer, analiseer, selekteer, implementeer en bestuur om maksimum waarde vir alle partye betrokke te skep asook die alliansie se waarskynlikheid van sukses te verhoog. Die doelwit was om 'n geintegreerde end-tot-end beeld te verkry van hoe om strategiese alliansies suksesvol aan te wend as 'n besigheidsgereedskapstuk in vandag se dinamiese en uitdagende besigheidsomgewing. Die studie het gewys dat besighede van vandag 'n oorweldigende aantal eksterne en interne uitdagings en druk moet verwerk. Hierdie uitdagings sit toenemende druk op maatskappy hulpbronne, vaardighede, bestuur en ander bevoegdhede om nuwe sterkpunte te ontwikkel en produkte en dienste vinniger en teen laer koste te verskaf. Tradisionele metodes hoe om hierdie uitdagings te adresseer soos interne hulpbronontwikkeling of aanskaffing van 'n besigheid wat die nodige bevoegdheid besit, is bewys om onvoldoende te wees en forseer maatskappye gereeld om essensiële elemente soos: tyd na die mark, organisasie buigbaarheid en beheer op te offer. Strategiese alliansies bied 'n alternatief aan. Strategiese alliansies kan maatskappye wat 'n tekort het aan spesifieke vaardighede of hulpbronne, betekenisvolle voordele bied deur middel van 'n skakel met 'n vennoot wat oor komplementerende vaardigehede en hulpbronne beskik asook makliker toegang gee tot nuwe markte en geleenthede gebasseer op sinergië en kennis uitruil. Alliansies sal die permanentheid van strategië soos samesmeltings en aanwendings vermy en maak tweerigting uitruil van hulpronne en vaardighede moontlik teenoor the suiwer finansiële natuur van besigheid uitfaseer. Die eerste stap in die alliansie proses is die formulering van die alliansie strategie. Die alliansie strategie sal dikteer waarom een vennoot en alliansie vorm beter is as enige ander beskikbare opsie, wat die maatskappy verwag om uit die alliansie te kry en hoe risiko's bestuur sal word. Die alliansie strategie is 'n bou blok of verlenging van die korporatiwe strategie en moet belyn wees met die missie en doelwitte wat bepaal is gedurende die strategiese proses. Die formulering van die alliansie strategie moet gebasseer wees op 'n analiese van die eksterne markomstandighede en die maatskappy se interne hulpbronne en kompeternde vaardighede. Die definering van die alliansie strategie verseker dat alle alliansie-verwante aktiwiteite konsikwent en gestruktureerd gedoen word. Sodra die strategiese alliansie strategie, doelwitte en alliansie formaat bepaal is kan die maatskappy begin om 'n vennoot te identifiseer en te selekteer wat beskik oor die vermoë en vaardigehede wat benodig word deur die alliansie en terselftertyd ook 'n soortgelyke behoefte het om betrokke te raak by die alliansie. Vennootseleksie vereis 'n gestruktureerde proses om te verseker dat die alliansie strategie en geselekteerde form omgeskakel word in 'n en verteenwoordig word deur sleutel besigheidskenmerke of areas wat geaffekteer word deur die alliansie. Die besigheid moet duidelik wees oor wat die strategiese doelwitte is en wat die vennoot profiel is wat verlang word. Hierdie doelwitte word verbind aan kriteria of vereistes waaraan die voornemende vennoot moet voldoen om te verseker dat die alliansie doelwitte bereik word. Die venote is nou reg om te bepaal hoe elke organisasie met die ander sal handel om sodoende die ooreengekome doelwitte van die alliansie te bereik. Dit sal bereik word deur 'n proses van onderhandeling en werk definisie. Die onderhandelinge is nie gebasseer op wen en verloor nie, wat beteken dat een maatskappy se wins is nie die ander maatskappy se verlies nie. Die alliansie besigheidsplan word ontwikkel gedurende hierdie fase en dien as 'n uitleg vir die toekomstige alliansie funksies. Dit is krities dat die maatskappye se leiers aktief betrokke raak by die proses op hierdie tydstip. Die bestuur van strategiese alliansies stel bekend 'n komplekse kombinasie van nuwe bestuur uitdagings wat gekoordineer en geadresseer moet word. Dit is die verantwoordelikheid van die alliansie bestuur om 'n verhouding van vertroue tussen die organisasies te vestig, kulturele probleme te adresseer en te verseker dat daar 'n deurlopende proses van twee-rigting kennis uitruil is. Hierdie oplossings asook die oorspronklike alliansie ooreenkoms sal egter tydelik wees as gevolg van die feit dat die alliansie gebasseer is op verhoudinge wat dinamies is en afhanklik is van eksterme veranderinge wat 'n invloed het op die alliansie en vereis daarom dat die alliansie gedurig moet aanpas by die veranderinge. Strategiese alliansies is glad nie 'n nuwe konsep in Suid Afrika. Die aanneem tempo van strategiese alliansies in vergelyking met wêreld standaarde is egter heelwat stadiger en geleenthede vir beide plaaslike en internasionale alliansies is nog nie op gekapitaliseer nie. Alliansies stel Suid-Afrikaanse maatskappye in staat om onnodige duplikasie tussen mekaar te verwyder, toegang te kry tot internasionale vaardighede en tegnologie, te bou op sinergië en wereld markte te bereik in 'n koste effektiewe en spoedige wyse.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/52760
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