Participating in a network also entails certain risks:
� Loss of control: the core of any partnership or alliance is sharing the control over activities undertaken in collaboration. Although that control may initially work fine, as more parties join in this is something to watch closely. � Networks may start to lead a life of their own, for instance because the participants get to know each other and may launch new initiatives.
� The distribution of revenue may take a turn for the worse for a particular company. For example when one company sell a machine and the other companies sell the consumables, and the sales of one consumables is less than expected. In joint ventures this drawback is shared with the other parties, in the event of licensing it depends on the actual agreements whether this is compensated.
In all cases, it is important to carefully consider whether to join a network.
Another case is when you see a project in the market and it makes sense to bid with a networks of partners.
Obviously there are multiple players in the market. Some partners offer a better chance of winning the deal than others. Differences can exist in the relationship with the client, in technology, and even in experience with selling a combined offer.
Last but not least: the potential to make a profit can differ per partner. What are their project management capabilities? Do they have experience with working with a partner? And how tough will you have to negotiate for your share of the profit? Your partner may even be cheating on you and leave you with nothing.
Just as you will evaluate your potential partners, they will evaluate you against the others. The two things that you can influence in this process are:
� � your own attractiveness, for example by investing in innovative solutions your contacts in the market, to enhance your visibility for others and to get more information.
As soon as you have identified your „ perfect ‟ partner you must aim for exclusivity. But often everyone waits to play his cards up to the last possible moment. A careful partner selection that starts even before the project is announced can help to make the added value of a specific network clear.
Making a good offer is a complex process, especially if you want to combine skills from multiple distinct companies. A tight timeframe with some slack is important, as it wouldn ‟ t be the first time that one of the parties backs out just before submitting the offer. To agree on exclusivity is one, but you can ‟ t force the other party to sign the offer. So make sure you have time for a backup plan.
The advantage of participating in a network is having additional opportunities in terms of turnover and profit, but the disadvantage is the loss of control. One of the best methods to increase your own influence is to limit the number of partners. This implies that, for each further partner, the benefit of admission to the network needs to be weighed against the loss of influence. When setting up a network it can therefore be a good strategy to choose a partner who is perhaps not the best there is, but who is able to contribute two or more different essential disciplines.
Being the one to initiate a network would seem to be an effective way of maximising control over that network. Recent research using games theory supports that assumption 30. Suppose that it would
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