The Internet Encyclopedia (Volume 3)

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342 STRATEGICALLIANCES

Table 1Core Competency Indicators Grid

Location x

Market share x

First in market x

Branding x

Reputation x

Technical expertise x

Customer loyalty x

Management team x

Innovation of employees x

Teamwork x

Trust x

Employee Turnover x

Financials x

14578910

Easy to Duplicate Mediocre Position Impossible for others to follow or imitate

the success of a company. One might conclude that it is

more important to spend time and dollars on employee

development and general satisfaction than in branding if

budget is at issue.

Comparing Strategic Alliances

for Different Businesses

As companies have focused on their core business mis-

sion and have looked to others to complete their desired

business model, interesting relationships have begun to

emerge. As computer manufacturers searched for ways

to differentiate themselves from other similar firms, they

looked for software other companies had developed for

use as operating systems many years prior to the Inter-

net.

As Gateway Computers strived for a market share

greater than that held by Dell Computers and others dur-

ing the 1990s, they looked for new ways to expand. They

began to create strategic alliances with software compa-

nies to develop and produce programs that Gateway could

include on their computer desktops. They created hun-

dreds of these strategic alliances as a means of outper-

forming their competition. During the same time, sev-

eral small businesses beginning to establish an Internet

presence were trying to identify potential partners that

might provide additional market exposure. Many of these

smaller companies did not have the resources to develop

marketing and human resource services “in-house.” The

blending of these companies’ strengths created opportu-

nities previously unattainable.

In another example, during 1999, CollegeCapital, an

Internet college preparatory and scholarship database

company developed a strategic alliance with American

Express. They provided resources to American Express

families as American Express provided exposure to their

enormous market. Both companies benefited from each

other’s third-party recommendation as they both had de-

veloped reputations in their specific markets of strength

and integrity.

Strategic alliances usually provide several equitable

benefits to each party in addition to revenue sharing, in-

cluding the use of each other’s sales forces, executive lead-

ership, and marketing ideas. Careful consideration should

be focused toward an identifiable, specific outcome before

the formation of any type of partnering association.

STRATEGIC ALLIANCE APPROACH TO

ENHANCEMENT OF DEPARTMENTS

WITHIN A COMPANY

Through corporate reorganization and downsizing, many

executives have been left without jobs or reengineered to

jobs that pay less. At the same time, small companies have

been unable to afford human resource departments or

assistants that at one time seemed imperative. As exec-

utives became proficient with the use of computers and

technology, the need for many support jobs once consid-

ered necessary was lessened or eliminated. Circumstances

like these have drastically changed the market in general

and have also lead to a boom of support-related services

and small business growth. Previously, where one secre-

tary worked within a corporation for one executive, many

former secretaries have now started secretarial compa-

nies, supporting several companies with secretarial out-

sourcing. Through using these types of strategic alliances,

companies are able to downsize or add support almost

overnight with very little disruption to ongoing business.

Professional corporations previously were most known to

be attorneys, accountants, and physicians. Since the In-

ternet boom, with the complexity and speed of technol-

ogy, small businesses as professional corporations have

formed to provide outsourcing for housekeepers, personal

chefs, Web site developers, software developers, secre-

taries, human resource directors, creative designers, and

consultants of all types. The list includes companies fo-

cused on creating strategic alliances.

Enhancing Executive Management through

the Use of Strategic Partners

Accounting scandals over compensation of senior exec-

utives, corporate bankruptcy, and misuse of company