Several factors create a need to establish cooperative strategic relationships:  Opportunities to enhance value offerings; the diversity, turbulence, and risking of the business environment; the escalating complexity of technology; the existence of large resource requirements; the need to gain access to global markets; the array of information technology

A) Value Enhancing Opportunities

A relationship may result in a much more attractive value offering

	Diversity refers to differences between the elements in the environment and social forces that affect resources.
	Organizations meet this challenge by altering their internal structures and by establishing strategic relationships

C)  Skill and Resource Gaps

	The skills and resource requirements of technologies in many industries often surpass the capabilities of a single organization
	Increasing complexity of technology:  Small companies with specialized competitive strengths are able to achieve bargaining power with larger firms
	Financial constraints:  The financial needs for competing in global markets are often beyond the capacity of a single company
	Access to markets:  Organizational relationships are important to gaining access to markets
	Information technology:  IT makes establishing organizational relationships feasible

D)  Examining the Potential for Collaborative Relationships

	Collaborative relations include shared activities such as product and process design, cooperative marketing programs, applications assistance, long-term supply contracts, etc.
	Partnering must be promising in terms of costs, good relationships, good candidates, and good culture fit.

 

A) Customer Supplier

Moving products through various stages in the value added process often involves linking supplier, manufacturers, distributors, and consumers and business end-users.

Vertical relationships occur between producer and marketing intermediaries

C)  End-User Customer Relationships

	Customer focus:  Relationship marketing starts with the customer -- understanding needs and wants and how to satisfy requirements and preferences
	Developing a customer -oriented organization includes:  Instilling customer oriented values and beliefs; integrating a market focus into the planning process; developing strong marketing managers and programs; creating market-baseed measures of performance; and developing a customer commitment throughout the organization
	Assessing customer value:  Relationship strategies need to recognize differences in the value of customers to the sellers as well as the specific requirements of customers

D)  Strategic Alliances 

	A strategic alliance between two organizations is an agreement to cooperate to achieve one or more common strategic objectives..  Note:  See Exhibit 7-6 for underlying strategic alliance motives.
	Kinds of alliances:  An alliance typically involves a marketing, research and development, operations, and/or financial relationship between the partners
	Alliance success requirements:  Depends heavily on effectively matching the capabilities of the participating organizations and achieving the full commitment of each partner to the alliance
	Alliance vulnerabilities:  The higher the level of dependence, the greater the strategic vulnerability

E)  Internal Partnering 

	Internal partnerships may occur between business units, functional departments and individual employees (Exhibit 7-3)
	The success of internal relationship strategies requires the development of strong internal collaboration that cuts across functional boundaries

A)  Objective of the Relationship

	Identifying and obtaining new technologies and competencies:  i.e., collaborate with universities and form joint ventures
	Developing new markets and building market position.  Increasingly, major companies are pursuing collaborative strategies in R&D and in gaining market access
	Market selectivity strategies:  Firms competing in narrow markets may need assistance from other firms

B)  Relationship Management Guidelines -- Successful Partnerships Involve the Following 

	Comprehensive planning
	Trust and respect
	Good conflict management skills
	Effective leadership
	Flexibility
	Acceptance of cultural differences
	Good technology transfer skills
	Ability to learn from the partner's strength

A) Types of Global Organizations

	Multinational:  Operates in several countries, but uses a separate organization in each country
	The network corporation:  Consists of a core corp that coordinates activities and functions between sources of supply and end-users
	Trading companies:  Functions as an intermediary organization  for an industry by developing sources of supply and demand (See Exhibit 7-9)

B) The Strategic Role of Government

	Single nation partnership:  A country's government may form a partnership with one company or a group to develop an industry, etc.
	Multiple-nation partnerships:  Regional cooperation among nations may encourage companies to form consortium relationships in selected industries
	Government corporations:  Nations may operate government owned corporations.
	Antitrust laws in the US prohibit certain kinds of cooperation among direct competitors