About Me

Michael Kapp has 20 years of high tech product marketing and product management experience and is currently VP of Marketing and Product Mgmt. for Control Solutions, a leading supplier of Enterprise Mobility  Solutions and Automatic Identification and POS equipment.  

View Michael Kapp's profile on LinkedIn

View my Company's Web Site - PowerTrack

« Building a Foundation for Successful Marketing | Main | Four Criteria for a Successful Patent »
Sunday
Jan132008

When to look for an Alliance?

Two of the most prevalent reasons to form an alliance or strategic partnership are for a) access to technology and b) access to markets.   NCR's alliance with Spectra-Physics in the mid 70s to create the in-counter checkout scanner was an example of both - Spectra-Physics brought technology to the partnership while NCR brought access to the retail markets.  The result was a product that dramatically increased productivity at the checkout and cemented the leadership positions of both NCR and Spectra-Physics (now Datalogic) in the checkout scanner market to the present day.

It is often said that there is nothing more risky than a company entering a new market with a new product.  In such a case, it significantly reduces risk by partnering with a company that already plays in that market.  By aligning with such a partner, it not only provides access to the partner's current customers, but the endorsement by the partner also provides additional credibility to the product within the market. 

Another related reason to strike a partnership is to build a "whole product solution" needed to break open the market.  There were many MP3 players in the market prior to Apple's entry, but it wasn't until Steve Jobs put together the deals with the major music companies to offer legal downloads for 99 cents, and the resultant iTunes site, that the whole solution came together.   The result was a dramatic "crossing of the chasm" and rapid growth in the mass market driven by the Apple Ipod. 

The building of a "whole product solution" could require alliances with providers of content, technology, software, or services such as contract manufacturing, installation or repair services.  Often outsourcing part of the solution to a partner will be a faster and more cost effective way to get to market, while maintaining ownership over the core or higher value activities.  There are few decisions more strategic than determining what part of the value chain should be maintained as core and what should be outsourced.  This is an important exercise which will require an assessment of long range scenarios and an understanding of the future source of value/profit.

 

 

Reader Comments

There are no comments for this journal entry. To create a new comment, use the form below.

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
Post:
 
Some HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>