Creating Profit Through Alliances - business models for collaboration E-book | Page 5

Foreword
Strategic alliances can be a great source of
competitive advantage. However, this only works if
each partner has a clear understanding of its market,
and the market for the joint proposition offered by
the alliance, and if the two can devise a business
model that benefits not only themselves but also the
customer.
Over the last several years I have been involved in
setting up a large number of alliances that helped
Philips advance in technology, in efficiency, or in the
way we meet our customers‟ needs. We sought
partners outside our industry and created entirely
new types of propositions, ones we could not have
created just by ourselves. This has helped to create
entry barriers for competitors: aside from meeting
the technology challenge, they would have to find
their own fitting partners, and then together with
them agree to realise a new proposition….and then it
still needs to be jointly brought to market!
Working with partners from different industries places
extra demands on an alliances business model. For
instance, the pace within the Fast Moving Consumer

Goods industry is entirely different from lifecycles in
the electronics industry. How to split investments and
revenue in such a case? And which partner captures
the extra brand value and is awarded the intellectual
property rights?
Numerous alliances exist, and a variety of
collaborative business models is called for. The point
is that few have been described. Therefore I welcome
the author's initiative with this book. I hope and trust
that it will help companies embark on partnerships
much better prepared. In that way we may all enjoy
new and innovative products and services, that would
not see the light of day without collaboration, yet
seem so obvious once they do.

Ivo Rutten
Vice President Corporate Strategy and Alliances
Royal Philips Electronics

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