Strategic alliances provide opportunities to strengthen your market position, gain new capabilities and resources, and enable you to grow and expand during difficult times. Many large, highly resourced companies already know this and are leveraging it to their advantage. But how can a small firm with fewer resources obtain and manage a high-performing alliance portfolio? Getting the alliance portfolio you dreamed of, and then managing it well over time, is not as impossible as it may seem, provided that you act early, make multiple approaches to various partners, give sequential attention to each, and generally avoid alliances with competitors.
Tools and Frameworks:
This article describes specific strategies that firms can employ, first to win over potential partners, and then to manage the portfolio in order to extract the maximum advantage and increase the likelihood of obtaining high-performing alliances for your own firm.
Examples Cited:
Telefónica, Google's Android operating system, Open Handset Alliance, VeriSign, several top players in the U.S. wireless gaming industry
Research Basis:
Findings based largely on a study of entrepreneurial firms founded between 1999 and 2002. Sample was diversified by geography (firms based in the San Francisco, Los Angeles and Seattle areas), entry date into the market, makeup of founding team members and investors, and prior connections to the industry, thus reinforcing the robustness and generalizability of the results.
Also, separate survey commissioned by KPMG, first of four joint ventures involving large multinationals (Fiat/Tata, ENI/Gazprom, KLM/Northwest and Finmeccanica/Alcatel), and then of CEOs, CFOs and senior executives of Fortune 500 and S&P 1200 companies with experience of and involvement in alliances across a diverse range of industry sectors in Western Europe and the Americas.
About the Authors:
Pinar Ozcan is assistant professor of strategic management at IESE, specializing in new technology markets, business ecosystems and the strategy of entrepreneurial firms.
Kathleen M. Eisenhardt is the Stanford Warren Ascherman M.D. professor of strategy and organization at Stanford University and co-director of the Stanford Technology Ventures Program.