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344 STRATEGICALLIANCESToday with the introduction of the Internet and
e-commerce, delivery has become one of the most de-
manding and difficult management problems. As cus-
tomers simultaneously connect to a merchant’s site, the
computer takes the order, captures the payment, and
sends notice to have the order filled. There is almost an
endless capacity for the number of orders that can be ob-
tained at the same time. The need for human interaction
becomes an essential element to the automated ordering
procedure in many cases. If an order was created inaccu-
rately, a customer most likely desires to call someone. The
order then needs to be fulfilled and shipped. This slow-
ing of the overall procedure has created new businesses
that focus on specific aspects of these processes. Huge
call centers having 24-hour access have formed almost
overnight. Fulfillment houses, warehouses full of several
different products from several different companies, have
been created. Product delivery is a system that has be-
come so competitive, complicated, and focused that there
are companies specializing solely in overnight delivering.
In some cities, like New York, delivery of office products
to waiting businesses involves bicycle delivery because of
traffic congestion. It seems in many circumstances that
there has been a simplicity reversion, of sort, to the “old
days” in order to deliver and obtain desired goods imme-
diately.
Creating strategic alliances from necessary delivery
partners has demanded unique approaches. If a com-
pany’s service is to guarantee a specific delivery, they must
have a dependable partner. Revenue sharing has been de-
veloped in some cases, to create a specific strategy to en-
sure dependable delivery. Delivery companies benefit by
creating a built-in customer base and are able to adver-
tise that they are partnered with a company known for
excellent customer service. An example of this type of
an alliance was referenced in the bookGetting Partnering
Right. The authors wrote, “FedEx has partnered with Intel
to take over part of Intel’s logistics. As a result, guaran-
teed delivery time has improved from four business days
to three—and delivery errors have been substantially re-
duced” (Rackham, Friedman, & Ruff, 1996 p.13).
During the summer of 2002, one physician in Los
Angeles, CA, decided to take his office to his patients. An
improvement over the “black bag,” by using today’s tech-
nology and several partner teams, patients are able to have
access to very sophisticated procedures while at home.STEPS TO FINDING THE RIGHT
STRATEGIC ALLIANCE PARTNERS
It is obvious in the complexity of e-commerce that one
company cannot “do it all.” Processes, regulations, ideas,
and human potential have grown to require an enormous
amount of expertise and information. Daily, the news car-
ries stories of large corporations, past “do it all” compa-
nies, now in trouble or already bankrupt. They missed
the mark. The larger some companies have become, the
more difficult it has become to readjust to competition at
the speed required to stay on top of the market.
How do companies create partnerships that will be
mutually beneficial? How do companies even know thatthey need partners? What steps can be taken for older,
established companies needing to be retooled? How can
partnerships be established when a company is just be-
ginning to form as a new e-commerce venture? Table 2
provides a checklist for determining strategic alliances.CASE STUDY
During the past several decades of business, as a company
grew, it usually expanded the various departments needed
to fulfill its business model. During the 1970s, for example,
a developer in Arizona started a home-building company
by obtaining land and partnering with a contractor who
built houses. Several subcontractors were hired to per-
form specific tasks: a large equipment operator, a cement
contractor, a framer, a roofer, and so on. The profits of
the development were split between the company owning
the land and the general home-building contractor. As the
company grew during a 20-year period, it began to form
various departments within its own organization, even-
tually buying out the original home-building contracting
partner. The development company grew to over 1,200
employees in more than 100 intercompany departments.
The developer owned the water company, the landscaping
company, the large equipment operations, the cable tele-
vision, and even the mortgage company. As e-commerce
began, customers were able to see home-building op-
tions and several home developments advertised on the
Web. They compared building plans with other developers
across the country, simultaneously. Mortgage rates were
compared against Web-enabled mortgage loan applica-
tions, rates, and funding. Buyers could shop for trees and
landscaping packages advertised on the Internet that once
were sold as part of the package with the house. Cable tele-
vision was being compared to other sources for television
reception delivery. This explosive change caused the devel-
oper to reengineer the entire company. Layoffs occurred
in many departments as the developer had to refocus on
exactly the things that his company could do better than
the competition. After the company was restructured, the
obvious competitive advantage was their ability to build
beautiful homes on unique land lots. Using years of ac-
cumulated customer information, knowledge as to what
the buyers wanted and how decisions were made, they
began to focus their marketing efforts through the use of
strategic alliance marketing partners, instead of through
additional employees. Partnered marketing companies
focused on staying ahead of marketing trends, not only as
related to home building but also other trends that might
effect a home purchase. The development company down-
sized, and closed many departments, replacing them with
consultants and strategic alliance partners.
The development company was able to view the enor-
mous change in the market and react quickly. Unfortu-
nately, many large companies have been lost because of
the inability of key executives to see the big picture driven
by e-commerce changes. If embracing innovation was not
a key ingredient of a company during the past 20 years,
the company has probably failed during the past 5.
The steps taken during the reorganization of the devel-
opment company began with a focus on their core com-
petencies. All key executive and management personnel