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Alliances can lead to outperformance and competitive advantage. Nevertheless, these rewards can be accompanied by high risk. Constant vigilance and significant commitment from the senior leaders of each side is necessary to maintain rigorous, professional end-to-end execution. Despite the fact that there is no “silver bullet” to help facilitate the success of an alliance, there are several factors that can help.
Defining the vision and developing an explicit alliance strategy. Select the right partner by screening and evaluating the market options. Develop a partner evaluation criteria priority partners. Identifying the critical capabilities that need to be strengthened through this collaboration. Renew your alliance portfolio regularly to ensure you are maximising your agreements.
Scan the market to identify the right partner who will complement your business. Combine company data to short list the partner options.
Having a Day 1 readiness and 100day plan will be key to unlocking value before the negotiations begin. Lean on our experience to avoid any roadblocks that might arise.
Assess their capabilities, technology, culture, commercial, operational and financial environment to element risks and surprises.
Negotiating and implementing alliances with clear communication and change management. Ensure your people know how to work together and build trust. Setting up the right governance and migration of systems will help create lasting success.
Evaluating various execution strategies in Alliance/JV formations will help to unlock value from the partnership quickly. Designing and modeling various capital structures, Model income allocations to determine tax shield, project cash flow, and identify opportunities to incorporate alternative allocation approaches will help to maximise efficiency.
Monitor operational effectiveness and manage change. Establish the financial report and shareholder communications to ensure you are meeting the strategic goals.
Alliances and JVs come to an end at some point. Working together to put the right set of arrangements around exiting at the start will help to track and measure the impact and then exit smoothly, limiting any confusion for your suppliers, customers and shareholders.