Alliances , M&A etc

What is inter-firm cooperation (IFC)?

Partnerships between independent firms to gain competitive advantage.

What are the main forms of inter-firm cooperation?

• Transactional relationships

• Strategic alliances

• Mergers and acquisitions

What is a strategic alliance?

A formal partnership between firms that share goals and resources while staying legally independent.

What are the three types of alliances?

1. Contractual / Non-equity alliances

2. Equity alliances

3. Joint ventures (JVs)

When do alliances make strategic sense?

• Entering new or difficult markets

• High uncertainty

• Need to share costs and risks

• Gaining access to local knowledge or regulation

What are four types of alliance value?

• Symbiotic relationships

• Knowledge sharing

• Outsourcing

• Risk sharing / investment management

What is the goal of the strategic assessment step in alliance formation?

To check if working together with another company will help a business reach its goals, grow stronger, and succeed in the long run.

Why is organisational buy-in important in alliance planning? (when key people in a company understand, support, and commit to a plan or partnership)

it ensures key people support the partnership, leading to better teamwork, faster decisions, fewer conflicts, and a stronger commitment to making the alliance succeed.

What is due diligence in partner engagement?

Process of carefully researching and evaluating a potential partner before forming an alliance. It involves:

• Checking financial health – Making sure the partner is financially stable.

• Reviewing reputation and history – Looking into the partner’s track record, values, and business practices.

• Assessing capabilities – Ensuring the partner has the right skills, resources, and experience.

• Identifying risks – Spotting any legal, ethical, or operational issues.

Why is the contract crucial in the partnership execution stage?

because it:

• Defines roles and responsibilities – Ensures both partners know what is expected.

• Sets clear terms – Outlines goals, timelines, and performance standards.

• Provides legal protection – Acts as a binding agreement in case of disagreements or problems.

• Manages risks – Includes terms for conflict resolution, changes, or ending the partnership.

• Supports smooth execution – Helps avoid confusion and keeps the partnership on track.

What should governance and evaluation include in an alliance?

• Clear decision-making structures – Define who makes decisions and how they are made.

• Roles and responsibilities – Outline what each partner is accountable for.

• Regular communication – Set up meetings and reporting systems to stay aligned.

• Performance metrics – Use agreed indicators to track progress and results.

• Conflict resolution methods – Include ways to handle disagreements fairly and quickly.

• Review and improvement plans – Schedule evaluations to adjust strategies and improve the alliance over time.

When should you exit an alliance?

When the partnership no longer meets goals, becomes inefficient, or strategic needs change.

How does a joint venture differ from a contractual alliance?

A joint venture forms a new legal entity with shared control, while a contractual alliance doesn’t involve ownership.

Why might an alliance fail?

Cultural or strategic misalignment
Lack of trust
Poor governance
Incompatible goals or values
Redundancy of resources
Better value from M&A

What are the main steps in creating a strategic alliance?

• Strategic Assessment – Evaluate if an alliance supports the company’s long-term goals.

• Partner Selection – Identify and assess potential partners for compatibility and value.

• Due Diligence – Research the partner’s background, strengths, risks, and reputation.

• Alliance Planning – Define shared goals, structure, and key responsibilities.

• Contract Negotiation – Create a clear, legally binding agreement outlining roles, terms, and expectations.

• Partnership Execution – Launch the alliance and begin joint activities.

• Governance and Evaluation – Monitor performance, manage the relationship, and make improvements as needed.

What is the first step in creating a strategic alliance?What is the purpose of the strategic assessment?

• Strategic assessment.

• To evaluate your own long-term goals, market risks/opportunities, and internal capacity.

What does partnership planning involve?

Gaining organisational buy-in, defining alliance structure, and creating a realistic implementation plan.

What are key criteria when selecting a partner?

Cultural compatibility
Strategic fit
Integrity
Resources
Operational strengths

What happens in the partner engagement phase?

You assess compatibility, perform due diligence, and create a joint business plan.

What is a joint business plan, and what should it include?

A shared document outlining the alliance’s goals, services, target market, resources, and success metrics.

What is the purpose of a partnership agreement or contract?

To define:
Scope of work
Asset ownership
Decision-making rights
Resource commitments
Exit and conflict resolution terms

What is alliance governance?

The system used to make decisions, manage performance, and resolve disputes.

What does performance evaluation involve?

Tracking progress using KPIs, reviewing strategy alignment, and making adjustments when needed.

What should happen if the external market changes significantly?

The alliance should be reviewed and possibly realigned or dissolved if it no longer fits.

Why is an exit strategy important from the beginning?

To prevent confusion or legal issues when the alliance ends.

What must be decided in the exit plan?

Who keeps what assets
What responsibilities continue
How to value the partnership upon exit