1. A Comparative Study of the
Motivations behind SAs and JVs
across different phases of the
Industry Lifecycle

2. Drivers and Motives for SAs and JVs
Strategic Alliances
 Acquisition of technology and joint
R&D for major innovations and
market advantage
 Assembling of complementary
resources to achieve or improve
global competitiveness
 Industry convergence requiring
interdisciplinary skills and interindustry cooperation
 Risk reduction when development
costs are very high and results are
uncertain
 Access
to
markets
when
governments’
policies
demand
alliance with a domestic firm
 Co-opting competitors or teaming
up against a particular competitor
Joint Ventures: Partners’ Expectations
Domestic Partner
Foreign Investor
Acquisition of
technology
Market expansion
and added profits
Introduction of
new products
Access to raw
materials
Increased
productivity
Decrease exposure
and risk
New management
techniques
Easier contacts
with government
Access to new
markets
Smoother relations
with workforce
Training of
personnel
Use local
managerial and
professional talent

3. The Stages of the Industry Lifecycle

4. Product Innovation vs. Process Innovation

5. Characteristics of Different Phases

6. The Introduction Phase

7. Introduction
When is an industry in introduction stage ?




In the introduction stage of the life cycle, an industry is in its
infancy
New, unique product offering has been developed &
patented, thus beginning a new industry
It may be a small entrepreneurial company or a proven
company which used research and development funds and
expertise to develop something new
Marketing refers to new product offerings in a new industry
as "question marks" because the success of the product and
the life of the industry is unproven and unknown
What are its Characteristics ?




Few competitors
No threat from substitutes because the
industry is so new
The power of buyers is low because those
who require the product are prepared to
pay to get hold of supplies that are limited.
Suppliers exert some power, because
volumes purchased are still low and the
industry is relatively unimportant for
suppliers.
What are the motivations for firms to enter into a Strategic Alliance?



Strategic necessities: In highly competitive and emergent industries, new ventures consider strategic
alliances either to pioneer innovative technologies, or to move away from a vulnerable position
Internal resources: The intellectual capital of a new venture represents an important determinant of alliance
formation, since the possession of valuable resources is a necessary condition for the attraction of suitable
partners
Social opportunities: The social connections of the founding team, along with endorsement by reputable
organizations – such as venture capitalists – facilitate start-ups’ involvement in strategic alliances
In a way, alliance making presents an inherent paradox for new ventures, since strategic alliances are set up to
access external resources, yet internal resources are needed to set up strategic alliances.
Sources: http://www.inc.com/encyclopedia/industry-life-cycle.html
Comi, A and Eppler, M. J. (2009) ‘Building and Managing Strategic Alliances in Technology-Driven Start-Ups: A Critical Review of Literature’

8. Introduction
What are the types of strategic alliances?
Exploitative Commercial Alliance
 Start-ups may enter into exploitative commercial alliances with the purpose of accessing the resources
necessary to introduce technological innovations to the final market
 An exploitative propensity generally leads to the constitution of strategic alliances with downstream partners,
such as large companies excelling at product commercialization.
Explorative Technological Alliances
 Explorative technological alliances enable new ventures to advance innovation, either by pooling together
complementary resources or internalizing the partner’s knowledge.
 An explorative propensity usually leads to the formation of strategic alliances with horizontal partners in a
similar positioning along the industry value-chain, or with upstream partners such as universities and
government labs
What are the challenges for firms to enter into Strategic Alliance?



In comparison to large companies, start-ups usually possess fewer technological resources to barter with
potential partners, and cannot engage in collaborative agreements at multiple stages of the value chain.
Besides, the limited social capital of new ventures is likely to restrain the attraction of valuable partners, and
the lack of prior work-related ties may further limit the opportunities for collaborative engagement.
The small size of management functions in new ventures also bears a negative influence on partnership
formation, since small functions usually have less extensive connections with potential partner
organizations. When the management function is small, top executives are also pressed with short-term
operating matters, thus lacking the time to bring about collaborative relationships.
Source: Comi, A and Eppler, M. J. (2009) ‘Building and Managing Strategic Alliances in Technology-Driven Start-Ups: A Critical Review of Literature’

9. Industry: Microprocessor
History




The year was 1979.
Atari introduced a coin-operated version of Asteroids.
3COM, Oracle, and Seagate were founded. The Motorola 68K and Intel 8088 were released.
Hermann Hauser and Chris Curry, with the support of a group of students and researchers from Cambridge
University’s many laboratories, set up Acorn Computers to make personal computers in Cambridge, England.
Formation of Joint Venture (JV)
•1985: Acorn Computer Group developed the world's
first commercial RISC processor
•1987: Acorn's ARM processor debuts as the first RISC
processor for low-cost PCs
•1987: Apple entered the PDA market and had
produced the first Newton, based on the AT&T low
power processor called ‘Hobbit.
1990: Advanced RISC Machines (ARM) spins out of Acorn and
Apple Computer's collaboration efforts with a charter to create
a new microprocessor standard.
VLSI Technology becomes an investor and the first licensee
JV
•John Stockton, Research Fellow of VLSI
Technology infected the design team with a
passion for ARM
Source: Levy, M., ‘The History of The ARM Architecture: From Inception to IPO’
IP Licensing Model

10. Strategic Alliance: ARM
Drivers for the Alliance
Resources to
design the
processor Apple
needed in form
of cash infusion
VLSI Technology
becomes an
investor and the
first licensee
Current Alliances
Required a
processor that
can handle
Newton’s OS
Current Scenario


ARM Holdings plc is the world's leading semiconductor intellectual
property (IP) supplier.
Designs are used in more than 95% of the world's mobile phones.
Share Price: ARM Holdings plc (LON:ARM)
Source: http://www.cpushack.com/2010/10/26/how-the-newton-and-arm-saved-apple-from-death/
http://www.arm.com

11. Industry: Fuel-Cell Vehicles
Roadblocks in Development






The partnerships come after the failure of electric cars to meet sales expectations, despite heavy subsidies
worldwide
Although hybrids have gained ground, more is needed to meet the new emissions targets
The research has shown that the FCV will emit less than half as much carbon dioxide as conventional
gasoline-powered vehicles do now
They would also release less carbon dioxide than electric vehicles when electric vehicles are charged in parts
of the U.S. that rely heavily on coal power
High development cost
Long Time-to-market
Strategic Alliance


French-Japanese-German partnership began in April 2010, with three “pillar projects” primarily focused
on Europe
In January 2013, Daimler AG, Ford Motor Company and Nissan Motor Co., Ltd., have signed a unique threeway agreement for the joint development of common fuel cell system to speed up availability of zeroemission technology and significantly reduce investment costs.
Source: http://www.reuters.com/article/2013/07/02/us-autos-fuelcell-hydrogen-idUSBRE9610JO20130702
http://www.greencarcongress.com/2013/09/20130912-daimlernissan.html

12. Strategic Alliance: Daimler, Ford & Renault
Characteristics of Collaboration







Collaboration expected to lead to launch of world’s first affordable, mass-market fuel cell electric vehicles as
early as 2017
Unique collaboration across three continents and three companies will help define global specifications and
component standards
Sends clear signal to suppliers, policymakers and the industry to encourage the further development of
hydrogen infrastructure worldwide
The goal of the collaboration is to jointly develop a common fuel cell electric vehicle system while reducing
investment costs associated with the engineering of the technology
Each company will invest equally towards the project
The strategy to maximize design commonality, leverage volume and derive efficiencies through
economies of scale will help to launch the world’s first affordable, mass-market FCEVs as early as 2017
The partners plan to develop a common fuel cell stack and fuel cell system that can be used by each
company in the launch of highly differentiated, separately branded FCEVs, which produce no CO2 emissions
while driving
Recent Developments



Toyota says it will unveil a hydrogen fuel-cell-powered sedan later this year that will go on sale in 2015
On July 2,2013, GM and Honda have announced partnerships to commercialize the technology
The prototypes that GM and Toyota built a few years ago cost well over $1 million each. Now Toyota says its
goal is to sell its fuel-cell sedan for less than $100,000
Source: http://www.daimler.com/dccom/0-5-7171-1-1569731-1-0-0-0-0-0-12037-0-0-0-0-0-0-0-0.html
http://www.reuters.com/article/2013/07/02/us-autos-fuelcell-hydrogen-idUSBRE9610JO2013070
http://www.technologyreview.com/news/516711/why-toyota-and-gm-are-pushing-fuel-cell-cars-to-market/

13. Identification of Similarities and Differences within the Introduction Phase
Differences
The technology was
in nascent stage for
both industries
Alliances and
JVs to create
innovative
product for
existing
markets
Alliance and JVs to
reduce the time to
develop and market
newer technology
Microprocessor:
Exploitative alliance to
create new
microprocessor
technology
Fuel-Cell Vehicles:
Explorative alliance to
pool together
complementary
resources
Microprocessor: Alliance
with downstream
partner excelling at
commercialization of
product
Fuel-Cell Vehicles:
Alliance with
horizontal partners in
similar positioning
along value chain
Similarities

14. The Growth Phase

15. Introduction
When is an industry in growth?
Characteristics
 A sector of the economy experiencing a
higher-than-average growth rate
 Companies across such industries exhibit
solid earnings and revenue figures
 Referred to as ‘Sunrise’ industry
 Increased costs on research and
development
 Market acceptance
 Increased ROI
 Declining costs of production
 Stiff competition
Common Examples of Industries in Growth
Various Possible Strategies









Telecom
Biotechnology
Solar Power
Retail
Pharmaceuticals
E-Commerce
Mining
Healthcare
Infrastructure







Capture Market Share
Beat the competition
Product Differentiation
Innovation
Value-Creation
Segment Expansion
Brand Expansion

16. Industry: Telecom
Industry Characteristics



50
40
Second Largest Telecom Network after China
The no. of Telephone users touched 897 million
Total Market Size: USD 64 Billion
 Urban M/Share: 61%
 Rural M/Share: 39%
30
20
40.4
CAGR(%)
2002-07
26.8
18.1
2007-12
2012-17
10
0
The Industry in Growth





Govt. policies and TRAI have provided a conducive
environment for Telecom operators.
Sector has become more competitive while enhancing
the accessibility of Telecom services.
Increasing network coverage and lowering tariffs
have increased the subscriber growth.
Internet subscribers have increased to 164 million
Mobile internet subscribers stand at 143 million
Major Alliances
Demand Drivers





Industry Trends






Indus Towers
NTT DOCOMO and Tata Teleservices Ltd.
Telenor and Unitech
Increasing Subscriber base
Mobile Value-Added Services
Mobile Number portability
Newer Telecom Technologies like 3G,4G
Decreasing cost of Smartphones

Prudent Regulatory policies
National Telecom Policy 2012 proposes unified
licensing, full MNP and free roaming
Telecom penetration is expected to increase to
70% from the current 41%.
The Green Telecom initiative aims at reducing the
carbon footprint for Telecom industry and TRAI is
in consultation since 2010.

17. Joint Venture: Indus Towers
The Joint Venture



Drivers for the JV
Indus Towers Ltd. is a joint venture of
Airtel, Vodafone and Idea incorporated
in Nov, 2007.
Provides Shared Telecom infrastructure
to Telecom Operators.
Operates in 15 circles out of the total 22
telecom circles.
Strategic
Focus
Economies
of Scope
Economies
of Scale
Opex
Savings
Market
Share
Additional
Towers
Network
Capacity &
Coverage
Streamline
Operations
Sharing of
Operating
Costs
Entry into
segments like
TV & Radio
Tower
Consolidation
Lower Cost
per Tower
Telecom
Companies
can focus
more on corecustomer
facing
business
The Current Scenario



Of every 5 calls made in India 3 are made
through an Indus site.
Cost savings of $3 Billion have been
recognized due to sharing of telecom
infrastructure
Numerous awards & recognition like the
Greentech Safety Award

18. Industry: Indian Pharmaceuticals
Industry Characteristics



20


Globally, pharma companies are facing pressure from
governments and taxpayers alike for reducing prices
of drugs and initiating outcome-based pricing
Global firms impacted by decline in R&D
productivity, increasing drug discovery costs, patent
cliff
Emerging Indian market offers ray of hope due to: Large domestic market
 Product Development Skills
 Scientific Talent
Major Alliances



Bayer-Zydus Cadilla
Lilly-Lupin
Novartis-USV
12.5
2002-07
2007-12
15.1
10
Period under Consideration: 2002 - 2012
Indian Pharma industry globally 3rd largest in terms
of volume and 13th largest in terms of value
Total Market Size: 1233 billion
 Domestic Consumption: 600 billion (48.6%)
 Exports:633 billion (51.4%)
0
CAGR (%)
The Industry in Growth

13
2012-17
Linear (CAGR (%))
Demand Drivers





Growing and Ageing Global Population
Growing Sick Population
Rising incidence of non-communicable diseases
Improve access to Healthcare
Higher Affordability
Industry Trends




One of the main ways MNCs enter the Indian market is
through acquisitions
However, given the scarcity of assets, valuations in the
sector have increased manifold
Companies are now exploring other ways of
collaboration through alliances and partnerships
Partner Selection: needs more thorough operational
due diligence

19. Strategic Alliance: Merck-Sun Pharma
The Alliance


Drivers for the Alliance
Alliance forged in 2011
To develop, manufacture and commercialize new
combinations
and
formulations
of
innovative, branded generics in the Emerging
Markets
Strategic
Focus
Marketing
Expertise
Innovative
Product
Development
Cost
Savings
Market
Access
Entry into the
high growth
emerging market
for Merck and
developed market
for Sun
Proven low cost
manufacturing
capabilities of Sun
Pharma
Merck had proven
expertise in broad
geographic
commercial
footprint
Sun Pharma
Advanced
Research
Company Ltd
(SPARC)
proprietary
platform
technology
Merck wellversed with
Clinical Trials
Regulatory
Approvals
Sun could focus
on core product
development
activities
The Current Scenario


Sun Pharma crossed the coveted twobillion dollar mark in revenues in
March 2013
Sun Pharma crossed ₹ 1 lakh crore
mark (around US $ 16 billion) in
market capitalization in 2013

20. Industry: Indian Construction
Industry Characteristics



15
10



Growing contribution to gross domestic product
(GDP)—from 5.1 % in 2001–02 to 7.9 % in 2010–
11
Globally the construction market is expected to
grow at 5.1 % and 4.7 % during 2010–15 and
2015–20
In India it is expected to grow at 9.9 % and 7.6 %
By 2020, India is expected to emerge as the world’s
third-largest construction market
Growth in nuclear families
Rapid Urbanization
Government support for
schemes
affordable
2010-15
7.6
0
Demand Drivers



9.9
5
The Industry in Growth

9
2005-10
Period under Consideration: 2005-2013
Highly fragmented industry
Total Market Size: 248,000 crore
CAGR (%)
Linear (CAGR (%))
Industry Trends



housing
2015-20
Few restrictions on foreign direct investment
(FDI) for infrastructure projects
Tax holidays for developers of most types of
infrastructure projects, some of which are of
limited duration
Opening up of the infrastructure sector for
Public Private Partnerships (PPPs)

21. Joint Venture: Sahara-Turner Construction
The Joint Venture


Drivers for the JV
Sahara Turner Construction Limited formed in 2012
Plan to undertake $25 billion worth projects of Sahara
Prime City over the next two decades
Strategic
Drivers
Cost
Optimization
Risk
Drivers
Leverage
Resources
Market
Penetration
Estimated that $
500 billion – $ 1
trillion will be
spent on total
infrastructure in
India In next 10
years
Sahara –
Land, Local
Market
Knowledge, Asset
Base of $25.94
billion
Turner –
Technology, 110
years of
experience
Share
Uncertainty/Unpr
edictability
Share Operational
Risks
Share Technology
Development
Risks


Sharing of
operating costs
which are
traditionally high
in construction
sector
Long Term
Competitive
Positioning
Scalability
The Current Scenario
8 projects in progress
Development and construction planned
for 21 cities

22. Identification of Similarities and Differences within the Growth Phase
Resource
Drivers
Similarities
Cost
Drivers
Strategic
Drivers
Market
Drivers
Differences
Construction:
Higher perceived
Demand risk
Pharmaceuticals &
Telecom: Lower
perceived Demand
risk

23. The Maturity Phase

24. Introduction
When is an industry in mature phase?
 An industry where growth is either
saturated or is at the same/slower rate
than at the broader rate of economic
growth
 The products/processes in the industry
are standardized and the players compete
mainly on price basis
Characteristics







Demand is saturated/slow-growing
Players too willing to discount
Eroding margins, profits, and returns
Cost-cutting to stay ahead
Consolidation of competitors
Incremental Innovation
Reinvestment rate is low
Examples of Industries in Maturity




Aviation Industry (US)
Oil and Gas
FMCG
Retail (US)
Various Possible Strategies
 Strategic innovation
 Prime focus shifts to controlling
costs
 Image
differentiation
through
Complementary services
 Consolidation amongst the players
 Achieve Economies of Scale
 Incremental Innovation: Limited
opportunity for product and
process innovation

25. Industry: US Airlines
Industry Characteristics






Period under Consideration: 1997 – 2011
Healthy operating margins between 1997-99
Companies started collaborating
Growth in passenger traffic was slowing down
Price of Crude increase post 2000
Post 2000 the margins started to decline
Source: Marketline

26. Strategic Alliance: Star Alliance
The Alliance
Drivers for the Alliance
 Alliance forged in 1997 – “The Airline
Network for Earth”
 Initially started with 5 members and
subsequently grown to 28
Increase
Revenues
Economies
of Scale
Joint
Sourcing
Price
Collusion
Collusion on pricing
routes dominated by
the JV
Cost reduction in the
material/supplies
obtained from
suppliers
Increase negotiating
power
Achieved in
marketing, creating
corporate deals
Attract passengers
from non-aligned
carriers
Double hubs used to
create funnel routes
Improve the operating
load
The Current Scenario
 The alliance currently comprises of
28 members
 United (founder member), US
Airways and Continental Airlines
are now a part of this alliance

27. Industry: Automotive Industry (US)
Industry Characteristics
Projected Growth
 Period under Consideration: 2011 –
Present
 Comprises of trucks, passenger cars and
motorcycles
 Volumes have increased at 4%
 Witnessed a serious contraction in 200809 but market has recovered since then
 Firms mainly look forward to Merger and
Acquisitions
Source: Marketline
Porter’s Five Forces
Source: Marketline

28. Strategic Alliance/Joint Venture: GM & PSA Peugeot
The Joint Venture


Long-term and broad-scale global strategic alliance
that will leverage the combined strengths and
capabilities of the two companies
GM and PSA Peugeot through this Joint Venture will
purchase commodities, components and other goods
and services from suppliers with combined annual
purchasing volumes of approximately $125,000 million
Drivers for the JV
Sharing
Knowledge
Sharing of vehicle
platforms, components
and modules for
product development
Reduce Cost
of Sourcing
Explore new
Opportunities
Reduce
Emissions
The alliance would
also focus on reducing
carbon emissions
To develop new global
projects to broaden
their alliance and seize
new opportunities.
Exploring
opportunities in
growth markets
including Latin
America and
Russia, which
represent priority
regions for both
Formation of a global
purchasing joint
venture to cut down
sourcing cost
The Current Scenario

GM will take responsibility for
developing both the new C3 Picasso
and
Meriva
MPVs
to
replace
Peugeot 208, Citroen
C3and Vauxhall Corsa by 2016

29. Identification of Similarities and Differences within the Mature Phase
Focus on cost
reduction from
sourcing
Means to
explore new
growth
opportunities
Combining forces
would reduce the
investment on R&D
Differences
Similarities
Airlines: No focus
on reduction of
R&D
Automotive:
Reduce the R&D
spend of each
firm

30. The Decline Phase

31. Introduction
When is an industry in decline?
 An industry where growth is either
negative or is not growing at the
broader rate of economic growth
 As the industry becomes challenged by
new
industries
that
produce
technologically
superior
substitute
products
Common Examples of Industries in Decline









Railroad
Steel (US)
Newsprint
Photofinishing
Book Publishing
DVD, Game and Video Rentals
Garments (US)
Wired Telecommunications
Salt mining
Characteristics





Costs become counter-optimal
Sales volumes decline
Profitability diminishes
Decreasing demand
Competitors start exiting
Various Possible Strategies
 Prime focus shifts to controlling
costs
 Re-inventing products and services
 Identifying and focussing on growth
segments within the industry
 Diversification
 Mergers, consolidations, alliances
and joint ventures
 Divestiture
 Make a quick exit!

32. Industry: Newsprint
Industry Characteristics




Period under Consideration: 2000 - 2010
US Newspaper Industry was a USD 50 billion business
(2002) and employed 400,000 people
80% of revenues from print advertising
Companies started adopting a cost leadership
strategy
The Industry in Decline







Changing readership habits as readers turned to the
Internet
The economic crisis severely impacted the industry
Print advertising revenues plummeted
Development of new journalism startups was
rampant, aided by low entry costs on the Internet
Between 2008 and 2010, eight major newspaper
chains declared bankruptcy (E.g.: The Tribune, Sun
Times Media Group, etc.)
Many smaller newspapers moved to Web-only
publications
Newspaper publishing companies were forced to
choose an optimal configuration of services and
activities to survive

33. Strategic Alliance: Yahoo! Newspaper Consortium
The Alliance


Drivers for the Alliance
Alliance forged in 2006
Effort to combine the newspapers’ unmatched
local news and advertising reach with the
technologies and audience of Yahoo!, to arrest
the decline in the newsprint industry
Paid
Search
Classifieds
on the web
Content
Distribution
Graphic
ads
Industrial
Evolution
Entry into the
emerging
industry trend
Newspapers
would use
Yahoo!’s adserving, targeting
and inventory
management
Newspapers to
integrate Yahoo!’s
paid search
across their sites
Classifieds and
job-related
advertisements
posted on Yahoo!
Hotjobs
Newspaper
content to be fully
integrated within
local news
modules
delivered across
Yahoo! verticals
The Current Scenario


The Consortium is currently comprised
of 36 holding companies and over 800
newspapers and drives 2 billion
monthly page views and 100 million
monthly unique visitors (2013)
Estimated consortium sales: USD 300
million (2013)

34. Industry: Book Publishing
Industry Characteristics



Period under Consideration: 2010 - present
Most books are published by a small number of very
large book publishers, but thousands of smaller book
publishers exist
The US Book Publishing industry is worth USD 28
billion and employs 78,561 people with an annual
CAGR of -1.4% (2008-13)
The Industry in Decline







Frightening rise of the e-book and e-book reader
markets
Shipments of e-book readers to triple between
2010 and 2014
The Association of American Publishers reported that
in Q1FY13, e-books outsold hardbound books for
the 1st time (USD 282.3 million vs. USD 229.6 million)
Ease-of-access of delivery of e-books have made
Amazon and Barnes & Noble the leaders in Internet
retailing
E-publishing set to take centre-stage soon!
Sales of brick-and-mortar book stores dropping
Established publishers are desperately seeking a
sustainable way forward

35. Joint Venture: Penguin – Random House JV
The Joint Venture


Drivers for the JV
Two of the world’s biggest English-language book
publishers, Penguin and Random House formed this JV.
The owner of Random House will have 53% of the
venture with Penguin’s owner, Pearson, having 47%
Each company retains certain ‘exclusive’ rights and
there are a variety of rules to protect each party
No. 1
Publishing
Company
Combined
success
Better scale
of operations
Greater
resources
Stronger
Platform
Together, they felt
they could take on
the e-book
business more
effectively
Would leverage
each other’s
resources to
invest in rich
content and
emerging markets
Combining forces
would give them
the scale they
need to compete
with the growing
challenges to
their business
Aim for combined
commercial
success in what
they do best
The JV would
surge ahead of
rival Hachette to
become the
biggest publisher
in the world
The Current Scenario



The Joint Venture was completed on 1st
July, 2013 and would employ more than
10,000 people worldwide
The JV aims to publish more than
15,000 new titles every year across 250
imprints
Estimated annual revenue of JV: USD
3.9 billion

36. Identification of Similarities and Differences within the Decline Phase
Differences
The Internet and
evolution of
technology
adversely affected
both industries
Alliances
and JVs were
sought as a
means of
survival
Combining forces
was felt to be the
best way forward
Newspaper: Alliance
done to merge with
the emerging
technology
Books: JV done to
take-on the
emerging trends
Newspaper:
Consortium served
as a means to assist
several players
Books: JV done only
between 2 major
players to become the
largest, assisting only
both of them
Similarities

37. Overall Similarities
and Differences

38. Benefits of SA/JV in Different Phases
Introductory
Phase




Resource shortage
compensated
by
partners
Partnering
with
reputed firms to
facilitate process of
development
Reduced failure risk
in new industry
Increased resources
to
develop
the
product and/or the
market
Growth
Phase




Increased
market
access and rural
penetration
Savings in operating
expenses
due
to
sharing of resources
Alliance
helps
in
increasing
the
strategic focus of the
partners
Collaboration helps in
achieving economies
of Scale and Scope
Maturity
Phase






Cost reduction from
sourcing
Price
Collusion
amongst the alliance
partners
Reducing investment
risk of the players
Gain economies of
scale
Gain market power
and
be
more
competitive
Acquire
new
capabilities
Decline
Phase




SAs and JVs are done
as a means of
survival
Methods to either
align with or take on
the
emerging
technologies/trends
which are causing the
industry to decline
Interdependence for
mutual benefits
Cost cutting is a key
to survival

39. A Comparative Study of the
Motivations behind SAs and JVs
across different phases of the
Industry Lifecycle