Corporations that are looking for network advantages have the opportunity to grow exponentially. A network advantage is when a corporation is connected to multiple companies; this connection or network gives the corporation value and creates a unique advantage.
An alliance can be any relationship wherein both parties have an exchange in value. Value can be defined in many ways: compensation, services, products, intellectual capital, credibility, etc…
The key to developing a network advantage is by understanding the elements involved:
- Alliance Portfolio
- Alliance Network
How do we define an alliance?
We define an alliance as when two companies work together and one or both provide value to each other.
Typical Vendor Relationship
In this image, Company A (triangle) is connected to Company B (triangle). Company A can be providing service to Company B (vendor relationship).It can also be reciprocal.
In a reciprocal alliance, both Companies are exchanging value. This can be how Android and Blackberry are now working together to provide hardware and an operating system. They both provide value to each other.
How do we define an alliance portfolio?
An alliance portfolio analyzes all the direct relationships that your company has with it’s vendors.
The corporation works with multiple vendors, suppliers, and customers. This relationship that your company has with all these firm is what gives your company it’s unique selling proposition.
How do we define an alliance network?
In a strategic alliance network, the entire relationship of all the connections are included.
The corporation’s vendors, and customers; and their vendors and customers are all involved to creating a unique value proposition. For instance, a software company has built a software product a telecom company. The telecom company targets small business owners; this software can be resold through the telecom’s B2B channel. This would give the telecom the ability to give more value to their customers; whereas the software company could now have a new distribution channel.