۱- Making alliances work

۲- Three collaborative business models

۳- Operationalizing collaborative business models

۴- Conclusions and recommendations

References

Abstract

It is not unusual for companies to generate substantial revenue through alliances. However, alliance failure rates are high, leaving much revenue at risk and value unrealized. The big challenge facing managers is to align company interests with alliance interests. Such alignment can only be achieved when executives pay considerable attention to building the right collaborative business model. In this article, we synthesize the insights of the existing literature to arrive at three collaborative business models—sharing, specialization, and allocation—that managers can use to address the specific requirements of their alliances. Because the literature provides limited insight regarding how to operationalize these models, we highlight what managers need to focus on when operationalizing each of these models. We find that the choice for an overall business model is relatively straightforward in most cases but that operationalization of business models requires more complex combinations of management techniques. Finally, we show how the three collaborative business models can be combined to build hybrid models.

Making alliances work

Alliances account for a large portion of company revenues and costs. Companies invest 30% of their research expenditures in alliances that generate over a quarter of their revenue (Kale & Singh, 2009). In addition to generating revenue, alliances play an important role in innovation (Kavusan, Noorderhaven, & Duysters, 2016). Still, many alliances do not realize their full potential. Executives do not pay sufficient attention to the fundamentals of collaborative business models that align company and alliance interests, without which alliances cannot bloom. In a collaborative business model, alliance partners can create, capture, and deliver value (Osterwalder & Pigneur, 2010; Rohrbeck, Konnertz, & Knab, 2013). Though the extantliterature provides insights into collaborative business models, less attention has been given to how collaborative business models are operationalized.In this article,we describe three primary collaborative business models identified in the literature and show that each business model has its own unique operationalization requirements that must be addressed consistently. Our conclusion is that the source of alliance complexity lies not so much in the choice of business model, as this tends to be relatively clear, but it arises in the operationalization phase when companies need to fine-tune the chosen business model to meet individual circumstances. We also discuss how executives can build on these three collaborative business models to create and manage more complex hybrid models.