Viewpoints on Strategic Alliances

Practical Guide To Strategic Alliances: Leapfrogging The Learning Curve US Companies (1993)

By John R. Harbison and Peter Pekar, Jr. Phd

This discussion document outlines the recent history of strategic alliances and reviews Booz*Allen's framework and methodology for assessing alliance processes. This is a generic document-without industry biases-which can be applied to almost any environment. The document is divided into four main sections:

  • Review of recent alliance activity
• Framework for alliance formulation
• Alliance formulation (generic approach)
• Implications for management

Recent alliance activity shows more than 20,000 new alliances between 1987
and 1992. This is a significant increase over earlier time frames.
However, not all alliances are "strategic;" in today's world alliances fill
the middle ground between strategic sourcing and acquisitions. The success
rate for strategic alliances is higher than that of acquisitions and
venture capital. They key to alliances is that they match strength to
strength and balance control with collaboration.

Booz*Allen believes it is possible to "leapfrog" the alliance learning
curve by adopting specific alliance best practices. Booz*Allen has
developed an alliance formulation methodology which helps reshape
management systems and processes and translate strategic priorities into
actions. This document provides sample best practice templates and
identifies seven areas of best practice as most critical based on
Booz*Allen's research and experience:

1. Conducting realistic feasibility studies
2. Anticipating business risks and mitigating them
3. Linking budgets to resources and priorities
4. Conducting realistic partner assessment and selection
5. Adopting superior resource strategy planning
6. Coupling investment and rewards with performance
7. Defining roles clearly

Finally, guiding principles and assessment approaches are outlined and
implications for management are provided.

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