FUNDAMENTAL CONCEPTS OF EXCELLENCE - PARTNERSHIP DEVELOPMENT

In the prevailing competitive landscape, alliances have become prerequisites due to following reasons:

• Increased competition from several countries
• Fast obsolescence of technology
• Fusion of technologies
• Increased capital intensity in manufacturing

In short, the major factors influencing the success of an organization lie outside the boundary and control of the organization, more so in a dynamically changing environment. In such an environment, partnerships are a means to ensure high level of operational linkages with the resources that are critical for the success of the organization and yet beyond its control. Strategy formulation process should identify the partnership opportunities to complement the core capabilities available with the firm by leveraging the core competency of the partners in creating value for the ultimate customers. Core capability and value chain analysis help firms to identify which capabilities to own and protect and which can be performed better by what kind of partners.

Success of partnerships depends upon various factors such as:

• The ability of managers to build trust with the partners and thus strengthening the relationships
• The creativity with which partners are chosen, contracts negotiated, performance indicators identified, and management structure established and monitored (partnerships are organized and managed)
• Taking a broad, strategic view of capability sourcing (to realize the full potential of sourcing, companies must forget the old peripheral and tactical view and make it a core strategic function)
• Managerial skills to survive amid increasingly fluid industry boundaries (knowledge of what and when to keep vital data confidential and when to share with partners)