The Internet Encyclopedia (Volume 3)

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Strategic AlliancesStrategic Alliances

Patricia Adams,Education Resources

Strategic Alliances in E-commerce 340

Strategic Alliances—The Way to Success

in Business 340

Trading Partner Relationships 340

Partnerships vs. Strategic Alliances 341

Partnerships as Strategic Alliances

Development Prior to E-commerce 341

Strategic Alliances in E-commerce 341

Identifying and Developing Core Competency 341

Comparing Strategic Alliances for Different

Businesses 342

Strategic Alliance Approach to Enhancement

of Departments Within a Company 342

Enhancing Executive Management through

the Use of Strategic Partners 342

Enhancing Marketing through the Use

of Strategic Partners 343

Enhancing Supply Chains through the Use

of Strategic Partners 343

Enhancing Delivery through the Use

of Strategic Partners 343

Steps to Finding the Right Strategic

Alliance Partners 344

Case Study 344

Creating a Larger Company Mission 345

Identifying the Part Your Business Plays 346

Identifying Strengths and Weaknesses 346

Create Compelling Reasons for Others to Seek

Your Company as a Strategic Partner 347

Developing and Maintaining a Strong

Relationship with Strategic Alliances 347

Comparing Benefits 347

Negotiations 348

Before Closing the Deal: Identifying, and

Resolving, Potential Problems with the

Relationship 348

The Contract 349

Creating a Process for Maintenance and Growth

of the Strategic Alliance 350

Conclusion: Strategic Alliances on a Larger

Platform Such as the Nation or the World 350

Glossary 351

Cross References 351

References 351

Further Reading 352

STRATEGIC ALLIANCES

IN E-COMMERCE

Strategic alliances are separating competition. The win-

ners are creating “best of the best” branding by form-

ing teams of people and “completing” companies from

past “competing” companies. Today, more than ever, most

businesses don’t have the desire, capacity, or resources to

grow without the help of other aligned partners. Former

paradigms of business development are being challenged

daily as new ideas, new companies, and innovation pro-

vide the leadership for others to follow.

STRATEGIC ALLIANCES—THE WAY

TO SUCCESS IN BUSINESS

Trading Partner Relationships

A “win/lose” mindset that exists in many trading part-

ner relationships is a dynamic that has kept value chains

from achieving a desirable performance. As stated in

the Voluntary Interindustry Commerce Standards (VICS)

Association for the Collaborative Planning, Forecasting,

and Replenishment (CPFR) Committee, a VICS commit-

tee made up of retailers, manufacturers, and solution

providers, “Under the CPFR approach, companies have

to look across value-chain processes to see where their in-

formation or competencies can help the value chain and

thus benefit the end consumer and the value-chain part-

ners. This outlook acknowledges that nobody wins until

theconsumer is satisfied. One of the keys to the success

of CPFR, in other words, is a changeover from ‘win/lose’

to ‘win/win’ value-chain relationships” (Corporate Values,

n.d.).

On the CPFR Web site, http://www.cpfr.org/Guiding

Principles.html, are the guiding principles developed for

CPFR out of the JMI and VMI best practices: “In the

course of this discussion, we examine traditional aggre-

gate forecasting and replenishment as well as vendor-

managed inventory (VMI), and jointly managed inventory

(JMI)” (Current Process State, n.d.).

The trading partner framework and operating process fo-

cus on consumers and are oriented toward the value

chain success.

Trading partners manage the development of a single

shared forecast of consumer demand that drives plan-

ning across the value chain.

Trading partners jointly commit to the shared forecast

through risk sharing in the removal of supply process

constraints.

Various trading partnerships exist today for unique en-

hancements to the relationship. A vendor exists to sell

something, a subcontractor to work for someone, a tac-

tical partner, possibly to oversee the partnership, and a

strategic partner, possibly integrated for several reasons

of interdependence that could also include a joint venture

partner, developed through an acquisition or a merger.

340