Creating Profit Through Alliances - business models for collaboration E-book | Page 55
comparable technology decide to develop this
further and sell it together.
Collaborate with a partner that owns other
scarce resources, in order to control the chain
together.
Collaborate with a supplier to obtain
alternatives for scarce resources, and help
spread these in the market. For example, if
process operators for the chemical industry are
hard to come by, then offer acquisition
guarantees to a training institute in return for
developing a dedicated training program.
Market dominance
If you wish to pursue market dominance, there are
several ways to go about it:
If you are the party supplying volume to the market
but not earning much in the process, then make
compensation arrangements with links in the value
chain that benefit strongly from your volume; for
instance with the instalment company that installs
and maintains your products.
Looking at the construction sector, we see that a
large share of the costs is due to the required steel.
For steel company Corus, a subsidiary of Tata, a
considerable portion of its turnover derives from this,
yet with on average just a slight profit margin. The
profits are made elsewhere in the chain, by the
distributors and processing companies. Corus
developed a response to this situation with what is
termed Ympress steel. This steel is produced
specifically for laser cutting, requiring fewer
corrections when processing the steel further. By
offering training courses for operators of laser cutting
machinery, Corus is able to penetrate the value chain
to a far greater extent than previously, and at the
same time gain a position from which it can advertise
the advantages of Ympress steel.
Entering into licensing agreements, so that a
product or brand name is used in multiple ways.
The Disney corporation is very good at this, with
Donald Duck, Mowgli and many other characters
appearing in many different products.
Finding a partner with a large production plant
or distribution network.
Collaborating with a partner that supplies
complementary products. The combination of
strong brands can generate additional
purchasing power, as demonstrated for example
by Karl Lagerfeld and H&M.
This strategy characteristically entails using the
channels or name recognition of the other party, who
generally also stands to gain from it. However, the
products or brands should be compatible to form a
relevant combination for the buyer.
Owning the customer relationship
Owning the relationship with the customer offers
such advantages as being the first to hear of
customer wishes and developments, being able to
directly influence the customer, and being able to
directly promote other products. Companies that do
not own customer relationships to any significant
degree can opt for the following:
Find partners in parties that have extensive
customer knowledge.
Collaborate with parties that can help build
customer knowledge in a functional sense, for
instance through their ample experience with
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