Collaboration Strategies

Reasons for going solo

Availability of capabilities; Does firm have needed capabilities in house? Does a potential partner?

protecting proprietary technology; How important is it to keep exclusive control of the technology?

controlling tech development and use; How important is it for firm to direct development process and applications?

building and renewing capabilities; Is the project key to renewing or developing the firm's capabilities?

Advantages of collabrating

PROS

obtaining needed skills or resources more quickly

reducing asset commitment and increase flexibility

learning from partner

share costs and risk

can build cooperation around a common standard

Types of collaborative arrangements

Strategic alliances

formal or informal agreements between two or more orgs (or other entities) to cooperate in some way

Joint Venture

A particular type of strategic alliance that entails significant equity investment and often establishes a new separate legal entity

Licensing

a contractual arrangement that gives an organization (or individual) the rights to use another's intellectual property, typically in exchange for royalties

Outsourcing

When an organization (or individual) procures services or products from another rather than producing them in-house

collective research organizations

Organizations formed to facilitate collaboration among a group of firms

Partner Selection

Resource fit

How well does potential fit the resource needs of the project? Are resources complementary or supplementary?

Strategic fit

Impact on opportunities and threats

Impact on internal strengths and weaksnesses

Impact on strategic direction

Does the potential partner have compatible objectives and a styles?

How would collaboration impact bargaining power of costumers and suppliers , degree of rivalry, threat of entry or substitutes

Would collaboration enhance firm's strengths ? Overcome its weaknesses? Create a CA?

Would the collaboration help the firm achieve its strategic intent?

Partner Monitoring and Governance

Successful collaborations require clear yet flexible monitoring and governance mechanisms

may utilize legally binding contractual arrangements

Contracts often include

help ensure partners are aware of right and obligations

provides legal remedies for violations

what each partner is obligated to contribute

how much control each partner has in arrangement

when and how proceeds of collaboration will be distributed

Review and reporting requirements

provisions for terminating relationship

May also use shared equity ownership (i.e. each partner contributes capital and owns a share of equity in the alliance)

helps to align incentives and provide sense of ownership

May rely relational governance (self-enforcing governance based on the goodwill, trust, and reputation of partners)

build over time

can facilitate more extensive cooperation, sharing, and learning by partners