Partnering and Strategic Alliances

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Partnering and Strategic Alliances

• Course Instructor
• Dr. Syed M. Ahmed, Ph.D.
• College of Engineering Computing
• Florida International University, Miami, Florida

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Major Topics

• Partnering/Strategic Alliances
• Innovative Alliances and Partnerships
• Internal Partnering
• Partnering with Suppliers
• Partnering with Customers
• Partnering with potential Competitors
• Global Partnering
• Education Business partnership

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Partnering/ Strategic Alliances - 1

• The simplest way to understand the concept of
  partnering or strategic alliance is
• To think of it as working together for mutual
  benefit.
• Maximum benefits of partnering are realized when
  all parties in the chain of partners cooperate.

Fig 1. Potential Partnership Participants
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Partnering/ Strategic Alliances - 2
Fig 2. Traditional Relationships
Fig 3. Contemporary Relationships
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Partnering/ Strategic Alliances - 3

• Benefits of Partnering
• Can lead to continual Improvement.
• Improve relationships among employees and among
  departments.
• Partnering Model
• Establishing partnering is a process that should
  be undertaken in a systematic way as shown in the
  figure.

Fig 4. Partnering Model
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Partnering/ Strategic Alliances - 4

• Develop a Partnering Briefing
• Before trying to establish a corporate
  alliance(partnering), make sure everyone involved
  understands partnering as a concept.
• Identify Potential Partners
• Any external or Internal supplier is a potential
  partner.
• Choose partners in an order determining how much
  value the partnership can have.
• Identify Key Decision Makers
• Identify key decision makers whose support is
  needed to make a successful partnership.

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Partnering/ Strategic Alliances - 5

• Conduct a Partnering Briefing
• Call a meeting of the key decision makers
  briefing the partnering concept.
• Determine the Level of Commitment
• After the key decision makers are briefed, gauge
  their commitment.
• Determine Whether there is Sufficient Commitment
• Proceed to the next step only if the level of
  commitment is sufficient.
• Identify Key Operational Personnel
• Identify the people who will be needed to input
  into action the commitment made by
  executive-level decision makers.

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Partnering/ Strategic Alliances - 6

• Form the Partnership Team
• The key people identified should be formed into a
  team. Teams willingness is a great key for
  partnerships success.
• Develop a Mission Statement
• The partnership needs a clear and concise mission
  statement so that everyone involved understands
  what the team is supposed to do.
• Develop Objectives
• Mission statement is translated into more
  specific terms by objectives.
• Prioritize Objectives and Begin
• The objectives must be prioritized and listed in
  order from the most important to the least.

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Innovative Alliances Partnerships

• Partnering between and among companies can take
  many forms.
• Consortium Buying
• Two or more companies get together to purchase
  common items in bulk.
• In-house supplier representative
• He works with the customers personnel to
  continually improve the supplier-customer
  relationship.
• Customer focus group
• It consists of customers who are pulled together
  by a supplier to provide feedback.

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Internal Partnering

• Partnering should begin at Home.
• Internal partnering occurs at three levels
• Management to Employee Partnerships
• Team to Team Partnerships
• Employee to Employee Partnerships
• The key concepts which define Internal Partnering
  are
• Creating Environment
• Establishing Mechanisms
• Bringing Individual Employees in Mutually
  Supportive Alliances
• Maximizing Human Resources

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Partnering with Suppliers

• True supplier Partnering requires an
  understanding of each partys needs and
  capabilities to establish a clear vision for
  focusing the efforts of people who work for buyer
  and supplier.

Fig 5. Evolution of Supplier Partnership
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Partnering with Customers

• Customer The end user of the product in
  question.
• The rationale for forming partnership with
  customers is
• It is the best way to ensure customer
  satisfaction
• It is the best way to be competitive.
• Any organization that produces a product can
  benefit from observing how it is used by
  customers.
• The key to success in partnering with customers
  is to get them involved early in the product
  development cycle.
• Surveys by mail and telephone Widely used
  strategy for customer satisfaction measurement.

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Partnering with Potential Competitors - 1

• Rationale is
• Competitiveness.
• The most widely practiced type of partnership
  among Small Midsized enterprises(SMEs) is
• The Manufacturing Network.
• It is a group of individual SMEs that cooperate
  in ways that improve quality, productivity and
  resultant competitiveness.

Fig 6. Industrial Clusters with Manufacturing
Networks in United States.
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Partnering with Potential Competitors - 2

• Network Activities
• The joint activities in which networks
  participate vary a great deal, depending on local
  objectives.
• Production
• Networked SMEs are able to pursue production
  contracts larger than any individual member
  company could undertake alone.
• Education Training
• By partnering, SMEs can solve the problem of
  Education Training through economy of scale.

Fig 7. Joint Activities of U.S. Networks
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Partnering with Potential Competitors - 3

• Marketing
• It is the most widely practiced joint activity
  among manufacturing networks of SMEs
• Product Development
• When the costs of developing new product can be
  divided among network members, product
  development becomes a more feasible concept.
• Technology Transfer
• Knowledge sharing is the approach networks use to
  promote effective technology transfer.
• Purchasing
• It is one of the most productive applications of
  the economy of scale gained from networking.

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Global Partnering

• The partnering concept, like all contemporary
  concepts, has a global aspect.
• Companies that market to customers worldwide
  should examine the possibility of partnering with
  suppliers worldwide.

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Education Business Partnerships

• Important factors in continually improving the
  performance of an organization
• Quality of Employees
• Quality of Human Interaction with Technology.
• The need to continually improve employees work
  skills is the primary force driving business and
  education partnerships.
• Partnering with business and Industry has become
  a common practice for institutions of higher
  education.

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Questions/Queries