Summary: Lecture 5.7: Partnerships

Read the summary and the most important questions on Lecture 5.7: Partnerships

• 2 Reasons for partnering

• What are the reasons for partnering?

  • Access resources and skills 

  • Gain cost efficiencies 

  • Speed time-to-market 

  • Access new markets 

  • Define industry standards 

  • Develop innovations and new products 

  • Develop complementary products 

  • Gain market clout 

  • Maintain focus on core competencies 

  • Learn from partners 

• 4 Vertical Partnerships

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• How are vertical partnerships formed and who is involved?

  formed between different levels of the supply chain through buyer-supplier relationships or supplier and OEM customers (ex: Business customers, manufacturers and distribution channel members, and end-user customers) 

  
  

• What benefits can be gained through a vertical partnership?

  • Efficiencies in accessing materials 

  • Collaboration to innovate and differentiate the end product 

• What are the benefits of having a vertical partnership with Manufacturers or other Distribution channel members? 

  – Access to downstream markets 

  – Relay market information 

• What is the benefit of having a vertical partnership between Companies and  Customers (end-users)?

  – Relationship marketing 

  – Long-term revenue stream 

  – Source of market information 

• 5 Horizontal Partnerships

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• How are horizontal partnerships formed?

  between firms that operate at the same level of the supply chain 

• How do Complementary Alliances form?

  Form with companies offering different components of the end-to-end solution

• What are the advantages of complementary alliances?

  – Allows each to maintain focus on own core competencies 

  – Stimulates demand through greater customer value

• What are Competitive Alliances?

  – Competitive collaboration (“co-opetition”) 
  

  – Compete in some market domains, collaborate in others

• 6 Risks of partnering

• What are the risks in partnering?

  • Trust issues 

  • Loss of trade secrets 

  • Loss of autonomy and control 

  • Increase project complexity 

  • Lack of attention/resources in managing the relationship 

  • Incompatible cultures