Marketing Strategy and Competitive Positioning pdf ebook

partnership?
Things change
– you need to
be aware
How well does
an alliance
perform on
important
criteria?
How do you
get out if
things go
wrong?

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444
CHAPTER 15 STRATEGIC ALLIANCES AND NETWORKS
15.8.1 Core competences
One of the fundamental attractions of collaboration and partnership with other organisa-
tions is that it allows each organisation to focus on its own core competences and to benefit 
from the specialisation of other organisations in their own areas of expertise (Achrol, 1991; 
Webster, 1992). Quinn (1992) noted: ‘If one is not “best in world” at a critical activity, the 
company is sacrificing competitive advantage by performing that activity internally or with 
its existing techniques.’ Certainly, research by Buffington and Frabelli (1991) in the telecom-
munications industry suggests that when partners in a collaboration do not contribute their 
core competences, then the probability of success for the alliance is substantially reduced. 
This suggests that clarity in defining those core competences may be critical to negotiating 
and sustaining effective inter-organisational relationships of this type.
However, there are two problems. First, it is clear that the identification of core com-
petences may be far from straightforward within an organisation or between partners (see 
Cravens and Piercy, 2012). Second, we have to factor in not just existing and recognised 
core competences, but issues of complementarity and ‘fit’ between potential partners, and 
the potential for synergy through collaboration. This is a complex and largely subjective 
evaluation that executives must make.
15.8.2 Strategic priorities
The issue of core competences also raises important questions about competitive strategy 
and the choices faced in when, where and how to compete (Prahalad and Hamel, 1990). 
While networking offers a company the opportunity to focus on and exploit its core com-
petences, only rarely will it create such capabilities for a company.
However, this focus and concentration may create vulnerabilities. For example, some 
years ago the British Airways alliance with USAir collapsed before the new alliance with 
American Airlines was approved. This left BA with no US-based collaborator and highly 
exposed to competitive attack by other alliances. While there is much current favour in 
corporate thinking for strategic focus and concentration, using collaborations as a vehicle, 
we should be aware of the risks involved in this prioritising. Reliance on partners to perform 
critical activities involves risks if the partnership fails or underperforms, and may leave us 
without the capacity to develop new competences.
15.8.3 Managing networks
It is apparent from the case examples given, that organisations differ markedly in their abil-
ity to manage effectively in networks or alliances. Forming and managing networks calls for 
a different set of management skills and issues compared to the conventional organisation.
Research suggests that lack of success in business partnerships and alliances is frequently 
because companies pay inadequate attention to planning. Lack of careful planning leads 
to conflicts about strategy, problems with governance and missed opportunities (Bamford 
et al., 2004). Bamford et al. suggest forming a team dedicated to exposing tensions as early 
as possible, and to deal with four challenges: (1) to build and maintain strategic alignment 
across the partner companies; (2) to create a shared governance system; (3) to manage the 
economic interdependencies between the partner organisations; and (4) to build a cohesive 
organisation.
Indeed, many of the problems that have emerged in the management of alliance-based 
organisations were captured in Bensimon’s (1999) executive guidelines:
● 
Assimilate the competences of your partner.
● 
Think of your partner as today’s ally and tomorrow’s competitor.
● 
Share power and resources, but share information wisely.
● 
Structure your alliance carefully.

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445
MANAGING STRATEGIC ALLIANCES
Before making the commitment to enter an alliance, we should consider the following 
factors:
● 
Drivers: which of the drivers of collaboration strategies apply in this case? What does 
a collaboration strategy offer us in terms of asset/cost efficiencies, customer service 
improvements, marketplace advantage over the competition and profit stability/growth?
●