BU491 Lecture Notes - Lecture 13: Market Capitalization, Conflict Resolution, Codeshare Agreement
Document Summary
Class 13: how to manage alliances better than one at a time. Failure of strategic partnership with danone and wahaha lead to dysfunctional behaviour: wahaha became dominant player in chinese bottled water through its alliance with danone. Formation of the new alliance may even be an overall value-destroying move. Companies can create strategically fit alliances by creating an alliance formation/function: bringing together multiple business units and inevitably requires interaction with independent partner companies, corporate-level department coordinates all alliance-related activity across a company"s multiple units. Advantages and disadvantages of incorporating an alliance function. Ensures overall effectiveness and compatibility of the alliance portfolio. Ensures value is created on both local and alliance portfolio level. Manages the balance between local problem solving and overall alliance portfolio effectiveness. Managers typically have little power over operational decision makers. Conflicts between central function and business unit are unavoidable due to diverging performance measures and interests.
