Marketing Strategy and Competitive Positioning pdf ebook

A borderless world: It is three decades since Ohmae (1990) wrote about the interlinked 
economy of The Borderless World. Companies are increasingly driven to compete glob-
ally, and collaboration offers an attractive alternative to competing alone in a new 
environment. We mentioned earlier the global networks being developed at IBM to 
reflect changing international connectedness. Another global initiative is the long-
standing partnership between competitors General Mills from the USA and Nestlé from 
Switzerland. They created a joint venture – Cereal Partners Worldwide – to market 
General Mills’ cereal brands in 130 countries outside North America. General Mills 
contributes its high-quality cereal brands and Nestlé provides its extensive interna-
tional distribution channels and local market knowledge, for an effective and endur-
ing global collaboration (see https://www.nestle.com/aboutus/overview/businesses/
cereal-partners-worldwide).
15.3.2 Skills and resource gaps
It follows that there are growing pressures on firms to collaborate to compete effectively 
in globalised, technology-driven markets. The costs of developing internally the full range 
of skills and capabilities needed to compete effectively may be beyond the resources of a 
single company, or simply more cheaply available through alliances with specialised part-
ners – where each partner can concentrate on applying its own core competencies, what it 
does best.
This may be of most importance with strategic accounts – the powerful major customers 
upon whom we have greatest dependence as a seller (see Chapter 14). Strategic customers 
generally seek ‘solutions-orientated’ packages that relate to their business problems and 
opportunities, and will accept nothing less from their strategic suppliers. Selling products 
or services is not acceptable. The problem faced is that constructing the appropriate ‘solu-
tion’ for the strategic customer may involve expertise and technology that forces the seller 
to partner with others. Johnson Controls, for example, is the highly successful seller of 
automotive seating and electrical switching. While Johnson manufactures seat and switches, 
it has had to partner with others to provide the simple ‘bolt-on’, modularised seating and 
electronics components systems required by modern car assembly plants.
Filling skills and resource gaps may also involve the creation of new brands and new 
business forms in surprising ways. For example, some years ago Honda Motor and Hong 
Kong Disneyworld formed a strategic alliance. As part of the alliance, Honda sponsors 
Disneyworld’s ‘Autopia’ attraction, which allows visitors to ‘drive to the future’ in elec-
tric cars and experience ‘outer space’, and supports the park’s safety features. Honda gets 
exclusive rights to use Disneyland images to promote its cars, motorcycles and power equip-
ment products in Hong Kong and China. The partners are looking for further opportuni-
ties for both brands to collaborate, and interestingly appear have to found ways to merge 

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THE DRIVERS OF COLLABORATION STRATEGIES
automotive and entertainment industry interests. Disney has similar corporate alliances 
with Siemens, Coca-Cola, Hewlett-Packard and others to share the Disney brand.
In other cases, an alliance may provide enhanced market access and open new ways of 
trading. For example, the fast-food chain McDonald’s has an alliance with Sinopec, the 
state-owned oil company in China that operates 30,000 petrol stations (and adds around 
500 more every year). The alliance is to support McDonald’s strategy of expanding drive-
through restaurants in China. The strategy is based on changing eating habits in heavily 
populated Chinese cities, which are becoming more Westernised, with more widespread 
car ownership and mobile lifestyles among the young, who favour purchases directly from 
vehicles. McDonald’s believes that Sinopec will provide a platform to build its China busi-
ness around drive-through restaurants.
Much of the growth strategy at Alliance Boots is based on partnering – Boots and Wait-
rose sell each other’s products in the UK and the company has merged with Walgreens in 
the USA to achieve global expansion. Alliance Boots’ goal of expanding sales of its emerging 
skincare brands is supported by a deal with P&G, which markets and distributes Alliance 
Boots’ Laboratories Serum 7 skincare range to pharmacies in Italy, Spain, Germany, Aus-
tria and Switzerland (Felsted, 2011). The partnership puts the power of P&G’s distribution 
network and marketing expertise behind Alliance Boots’ products, while giving P&G (the 
maker of Olay) a more exclusive brand to expand the skincare product portfolio it sells in 
these markets (Rigby and Felsted, 2010a, b).
15.3.3 Supply-chain management
One recent manifestation of the pressure to collaborate is the proposal for the ‘lean enter-
prise’ (Womack and Jones, 1996), which involves partnering between companies at different 
stages of the supply chain. The Efficient Consumer Response (ECR) programme of ‘coop-
erative partnerships’ between retailers and manufacturers who have committed to reducing 
costs in markets such as grocery, is illustrative of this.
When Google launched Android as a key part of its mobile phone strategy, the pack-
age of open-source software was designed to make it easier and cheaper to build the next 
generations of smartphone services. However, on a broader front, Google also launched 
its Open Handset Alliance to attack Nokia and Microsoft. The alliance had 34 mobile 
and technology company members at the outset, including handset makers Samsung and 
Motorola and mobile operators NTT, DoCoMo and T-Mobile. Importantly, open handsets 
running any applications desired by the user weakens the existing mobile phone compa-
nies’ business model. Google was trying to make the value chain for wireless mobile like 
that in the broadband Internet market – where applications are developed independently 
of the device manufacturer and network operators, thus relegating operators to a minor 
role (Waters and Taylor, 2007). Google’s gamble was that redesigning the value chain 
would reshape the mobile phone business to its advantage (Taylor et al., 2007). Certainly, 
it appears to have paid off, in that Microsoft and Nokia are no longer serious players in 
the smartphone space. That said, Apple’s huge share of the smartphone market remains, 
operating with a completely different ‘walled garden’ framework.
Sometimes supply-chain collaborations may be problematic, as discovered when the 
French train operator Société Nationale des Chemins de Fer and network operator Réseau 
Ferré de France acquired a fleet of trains too wide to fit French railway station platforms –
1,300 platforms have to be trimmed to fit the new trains at a cost of almost $70 million 
(Horobin, 2014). On a broader scale, Boeing’s 787 ‘Dreamliner’ relied on a key strategy of 
outsourced manufacturing. Only 10 per cent of manufacturing is done by Boeing, the rest 
is supplied by 40 partners – wings built in Japan, the carbon composite fuselage in Italy 
and the United States, and the landing gear from France. The Dreamliner has 367,000 parts 
sourced from a global network of 900 suppliers. Managing a collaborative supply chain this 
complex has severely stretched Boeing’s capabilities, and there have been major problems 
with poorly fitting components and delays leading to cancelled orders (Weitzman, 2011).

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