Alliance Advantage, The Art of Creating Value through Partnering

Citation

van Hoek, R. (2001), "Alliance Advantage, The Art of Creating Value through Partnering", Supply Chain Management, Vol. 6 No. 1, pp. 48-51. https://doi.org/10.1108/scm.2001.6.1.48.2

Alliance advantage is a relevant contribution given the role of alliances in the supply chain and the strategic approach of value creation through partnering. The strategic analysis of alliance development by example made me realize how far off traditional third‐party logistics service provision is, despite the consistent lip‐service paid to alliances (see about every advertisement on trucks and van Laarhoven and Sharman (1994)). Doz and Hamel explain how alliances can be defined in operational, economic and strategic scope. Many traditional third‐party logistics service providers (TPLs) remain at the operational level (warehouses, shipments) at best, with a small economic component through cost savings. These “price breaks” however position TPLs as true third parties, not as “one of us” in the typology from Doz and Hamel. Furthermore, the proper operational scope setting includes a sufficient interface to facilitate joint learning, according to Doz and Hamel. Luckily, some innovative TPLs are now actively targeting the knowledge and information content of their services. These companies are only a segment of the audience that might benefit from this book, again, given the relevance of alliance in the supply chain and the much‐needed strategic input to the further development of supply chain practice.

The authors of Alliance Advantage make an interesting team. Doz (INSEAD, known for his work on international competitive strategy, among many other contributions) has served on the faculty of Harvard Business School. This might explain the clear structures used in the book, the alliance typology (co‐option, co‐specialization and learning and internalization alliances) and the development of analysis schemes such as the value creation matrix and the nine interpartner gaps and interface bridges, using the typology. Hamel earned his PhD on supply chain alliances at the University of Michigan, so he is definitely able to bring a lot of insights to the book. An interesting result (probably based on his contribution) is that Harvard‐like positioning elements (value creation matrix and terms such as complementarity of partners, partner assymetry) are complemented with resource‐based elements such as learning.

In addition to the strategic analysis, elements of implementation and management are also addressed in the book. An interesting suggestion is that of an evolution of alliances from emerging information and action networks, through multilateral alliances to competitive coalitions. This final form would fit Christopher’s projection of supply chain, not companies, as the competitive unit, and challenges the further development of supply chains. It is a pity, though, that the structuring around the three types of alliances is somewhat loosened up in these chapters. Not only does this sacrifice the running line in the book, it might also suggest that implementation and control is a more universal process than analysis and development of alliances. The growing distinction between traditional and innovative TPLs, however, suggests the opposite. Also, the advice in these chapters consists of somewhat stand‐alone one‐lines such as: “be realistic with your expectations” and“step outside the process for a better view”. The robustness of these chapters (not meaning to say anything about the strategic analysis chapters in the beginning of the book) may have to do with the research foundation of the book. A relatively limited number of case examples are used, and the Alza‐Ciba‐Geigy alliance has been used fairly often by the time the reader is two‐thirds through the book.

Returning to the strategic analysis chapters, I was particularly pleased with the inclusion of a learning/knowledge‐based alliance in the typology. My own recent research indicates that in the developing knowledge economy, sharing of information and knowledge becomes part of the key production function. The economics of this process will differ from traditional industrial economics; replication of information by example might be costless and to the benefit of supply chain players. This opposes expensive production processes and a careful competitive positioning of fixed investments and physical resources. On these foundations, alliances may be highly temporal and dynamic in response to fluid and variable customer demands around the world (“every customer his own supply chain”). These developments are not included in Alliance Advantage, the focus is more on careful positioning and continued, longer term, development of bi‐lateral alliances, instead of dynamic, open and fluid alliances (there is only one chapter on multi‐company alliances and webs, with a one‐page section on dynamic networks).

Still, I am looking forward with great interested to Doz’s forthcoming book called The Metanationals: Competing Globally in the Knowledge Economy. In the meantime, we can get on with the considerable work still to be done with TPL and other interfaces, to enhance value creation across companies within the supply chain.