Creating Profit Through Alliances - business models for collaboration E-book | Page 99

Conclusions
In each case, the principal concern is value creation
and the distribution of the added value of
collaboration among the participating partners.
Alliances that seek to enhance the relevance of a
business for its customers often apply a profit-sharing
mechanism based on the additional sales or extra
margin. For alliances devoted to developing unique
products, the cost distribution is generally quite clear,
the principal issue being the ownership of intellectual
property rights. For alliances geared to achieving cost
advantages, splitting those advantages is often a
simple matter.

Alliances can play a significant role in the pursuit of
company strategy. The type of strategy through
which a company seeks to stand out in the market
will generally determine the most suitable form of
alliance.
This book took three generic strategies as point of
departure. These types are based on work by Porter
and Treacy & Wiersema, but have been elaborated
further with a view to the changing circumstances
over the past decade; primarily the immense increase
in the accessibility of information and availability of
capital.

The various ca ses demonstrate that an alliance often
comprises several areas in which the partners
collaborate. By analysing collaborative ventures in
terms of several basic types, it becomes easier to
establish cost and profit allocation mechanisms. This
helps standardise the process of forging an alliance,
which contributes to the main aim of this book: to
facilitate companies wishing to enter into alliances.
Clarifying the goal of an alliance and elaborating a
mechanism for the distribution of costs and revenue
is the first step in drawing up a contract. Chapter 5
explores a number of other important aspects.
Though each alliance is unique, the underlying
contractual provisions are often much less so. Here
lies a subsequent challenge towards the
standardisation of processes, which would make the
use of alliances as a competitive instrument even
more accessible.

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