Strategic Alliances : Partnering for Advantage

Representative Alliances in the Semiconductor Industry

Partners IBM Motorola Toshiba Siemens Advanced Micro Devices Fujitsu Intel AT&T Texas Instruments Qualcomm Advanced Micro Devices Motorola Intel 64-bit Itanium microprocessor (earlier Technology 256-megabit memory chips Advanced flash memories

Advanced flash memories Wireless communication chips Technology cross-licensing pact Copper deposition technology in ship circuitry

Partners Lucent Technologies NEC Mitsubishi Electric Toshiba Samsung Phillips Electronics STMicroelectronics Taiwan Semiconductor

Technology Custom-designed communications equipment Advanced memory chips

chips

for

90-nanometer ship technology

IBM Xilinx
Toshiba Infineon Technologies

System-on-a-chip technology using Power PC architecture

Advanced DRAM chips

Intel Analog Devices

Advanced DSP chips

Representative Alliances in the Biotechnology Industry

Partners Biogen GlaxoSmithKline
Amgen Kirin Brewery Onyx Pharmaceuticals Bayer AG Chiron Novartis Genentech Hoffman-LaRoche Neurocrine Biosciences Eli Lilly Agouron Pharmaceuticals Roche Holding, Ltd. Anticancer drugs

Technology Tissue regeneration

Blood platelet growth factor Arrow drug delivery technology Genetic mapping technology Tissue plasminogen activator Corticotropin hormones releasing factor (CRF)

Partners Human Genome Sciences GlaxoSmithKline Millennium Pharmaceuticals American Home Products Creative BioMolecules Biogen Incyte Pharmaceuticals Monsanto Pioneer Hi-Bred DuPont Bayer AG Millennium Pharmaceuticals Merck Sunesis Pharmaceutical AstraZeneca PLC Orchid Biosciences

Technology Genetic mapping technology Genetic mapping technology Kidney treatments Genetic engineering software Genetically engineered seeds for agriculture

Genetically engineered cancer-fighting compounds Alzheimers drugs Advanced single nucleotide polymorphisms (SNPs)

Sample Alliances in the Global Auto Industry

U.S. Unit/Product DaimlerChrysler Partners General Motors Technology Transmissions and fuel cells in United States Joint investment in Latin America Nissan Automotive components Advanced Modular Engines

DaimlerChrysler BMW United Technologies DaimlerChrysler Mitsubishi Hyundai Caterpillar DaimlerChrysler General Motors Toyota General Motors General Motors Ford

Medium-duty engines Fuels cells and hybrid technology Isuzu 40% equity stake Fuji Motor 20% equity stake Toyota and Toshiba Hybrid motors

engine

Arms-Length Relationships Licensing Comarketing

Single Partner

Highly Coordinated Relationships Outsourcing Coproduction Knowledge sharing

Tight Integration Joint ventures Equity stakes

Multipartner

Industry-wide licensing Industry standards committees

Industry consortia Knowledge webs Cross-holdings Equity stakes

Multipartner joint ventures

Deepening Dependence on Alliance Partner

Sourcing for components Low price deters future investment Sourcing extends to joint venture Venture includes shared technology development around core skill

Sustained losses induce resignation, exit

Domestic firm feels price pressure in every market based on core technology

Alliance partner, becoming Stronger, attacks firms other markets

Sourcing for components

Process repeats itself across every firm competing in similar industry or line of business. Eventually, U.S. industry loses ground in cumulative effect. Co-opetition: The strategic situation whereby a firm cooperates and competes with another firm(s) at the same time. Firms in co-opetitive relationships often race with one another to learn each others skills and to develop new sources of knowledge or value-creating activities.