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Alliances and other things

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Every time we talk about alliances it is important to clarify what are we talking about. Obviously an acquisition is not an alliance. A McDonalds franchise is not an alliance. A contract to supply tyres for the new VW Beetle is not an alliance. We consider alliances to be other types of agreements between companies, affecting parts of their operations on a permanent or temporary basis, different from the conventional customer/supplier relationships, generally involving sharing resources in some way, while not preventing competition. We will refer in this presentation to alliances as situations where the partners do not individually have the necessary resources to accomplish whatever is their objective and then, they decide to combine their efforts sharing some of their resources. For example, if six airlines, including United and Lufthansa form the so-called Star Alliance, or if Coca-Cola and Nestle decide to get together to produce, sell and distribute Nestea, these are alliances. However, if General Mills decides to distribute its breakfast cereal in China through Nestle or Jaguar and Louis Vuitton decide to sponsor together a golf tournament, these are a conventional distribution agreement, and a conventional joint promotion. If Philips and Sony agreed in some way on the standards for the minidisk, or the high definition TV, things that I do not imply, I am not sure we could call this an alliance, I would call it just a non-competing agreement. Perhaps with a lot of sense, but, at the end, a non-competing agreement.

Document Type: Research Article

Affiliations: IESE, Universidad de Navarra, Barcelona, Spain.

Publication date: October 1, 1999

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