Viewpoints on Strategic Alliances

The Allianced Enterprise: Breakout Strategies for the New Millennium (2000)

By John R. Harbison, Peter Pekar, Jr.
Albert Viscio and David Moloney

Strategic alliances are sweeping through nearly every industry and are becoming an essential driver of superior growth. The value of alliances is estimated to range between $30 trillion to $50 trillion within five years. Peter F. Drucker has said that there is not just a surge in alliances but "a worldwide restructuring" is occurring in the shape of alliances and partnerships.

Recent surveys by Booz Allen have revealed:

? More than 20% of the revenue generated from the top 2,000 U.S. and European companies now comes from alliances with more predicted in the near future.

? These same companies earn higher ROIs and ROEs on their alliances than from their core businesses.

? Leading edge alliance companies are grouping alliances in a concentrated manner thus creating a string of interconnected relationships to rapidly over power the competition.

? The traditional "Command and Control" Organizational Model is inadequate to manage the complex set of relationships forming outside the direct control of the corporation.

Why is a New Organizational Model called for? What does it look like? How does it work? How does it differ from the traditional command and control organizational model, which has worked so well up to now?

This Viewpoint addresses these questions, and covers:

? The Five Driving Forces Behind Alliances

? The Three Alliance Modes

- Filling Single and Multiple Gap Deficiencies
- Creating Integrated Products and Services
- Forming a Breakout Offering

? Four "Pure Tone" Alliance Models

- Franchise Model: Deep Bench Strength
- Portfolio Model: Hub and Spoke
- Cooperative Model: Mutual Benefit
- Constellation Model: Integrated Service Offering

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