Creating Profit Through Alliances - business models for collaboration E-book

Contractual agreements Traditional contract • Transactional customer Unilateral agreement • Licensing, franchising • Long term outsourcing Bilateral agreement • Joint R&D, marketing, distribution Minority share • One sided Joint Venture • 50% - 50% • Other proportions Dissolve a company • Merger • Takeover /supplier relations Partnerships Share transactions losses incurred by the alliance. The structure then resembles a contractual arrangement. In all four cases (unilateral and bilateral contract, minority stake and joint venture), the point is for the companies to find a way to gain access to the partner's valuable resources without losing control over its own. • Exchange of shares Figure 28, Different legal forms of collaboration The scholars Das and Teng contend that the preference for the type of collaboration depends on the type of resources contributed by the two parties34. Are these:  For a shares transaction we can distinguish between:   a minority stake taken by one the partners in the collaborative partner, or a share swap in which the parties exchange shares; a separate new legal person in which the collaborating partners are shareholder, commonly known as a joint venture.  The most likely preference depends on the combination of resources contributed by parties A and B, as represented in Figure 29. Depicted in this way, an alliance resembles a halfway house between two independent parties engaged in a traditional contract or a merger or takeover, but research has shows that alliances between companies rarely result in such a merger or takeover33. Company B Compnay A The term Joint Venture is frequently used to describe a collaborative business. However, the term does not have a legal status in all countries. It can be a regular company with shareholders and limited liability, where the shares are distributed among the partners. This is the way it is used in this book. In other countries it can be an entity without the possibility to hold assets, where the partners are both liable for material resources that cannot be copied, such as money, production means, personnel, distribution channels and patented knowledge; or knowledge-based resources that can be copied, such as work methods, market information and databases? Material resources Knowledge based resources Material resources Preference by A and B for unilateral agreement, in which use of resources is compensated Preference by A for a joint venture: here knowledge is shared most quickly Knowledge based resources Preference by A for a minority share in B to retain control over own knowledge Preference by A and B for bilateral agreement: detailed arrangements can be made about knowledge sharing Figure 29, Most likely preferences regarding type of alliance, from company A's point of view 85

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