Tutorial 1: Network Advantage

Question 1

Definition: Alliances

Answer 1

Enduring and formalised collaborative relationships between two firms that involve significant exchange of information and resources.

Question 2

3 key advantages that a firm can unlock from its alliance network:

Answer 2

• Information: new ideas, products, customers
• Cooperation: resource-sharing synergies
• Power: influence

Question 3

First degree network advantage

Answer 3

Ability to combine your firm’s resources and capabilities with the resource and capabilities of each individual alliance partner.
- compatible partners: trust each other and have similar skills and routines
- complementary partners: bring different skills and knowledge
+ 4 dimensions of fit

Question 4

Second-degree network advantage

Answer 4

Form the right portfolio configuration to match your firm’s strategic imperatives.
It’s the ability to get timely access to information, secure cooperation and gain power using your connections among your firm’s alliance partners.

You look at your partners in your alliance portfolio and at their connections:

• integrated - incremental innovations
• hud-and-spoke - breakthrough innovations
• hybrid

Question 5

Third-degree network advantage

Answer 5

Information, cooperation and power gained from being positively evaluated by others as a result of the firm’s central position in its alliance network.

• link to other high-status firms
• link to lower-status firms

Question 6

6 principles of network advantage:

Answer 6

• links among alliance partners transfer: information, cooperation and power
• these advantages are not evenly distributed Whithorn the network
• success comes to firm that actively manage their alliance portfolio
• It’s important to recognise the different mechanisms at pay in the 1st/2nd and 3rd degree perspectives to be able to shift across these perspectives in designing your alliance portfolio
• network advantage accrues to those firms which are best positioned within the network
• maximum network advantage is realised when an organisation coordinates its alliance activities internally.

Question 7

Status

Answer 7

Perceived level of leadership and influence a firm has in its industry

Question 8

4 dimensions of fit

Answer 8

Complementary:
- Strategic 
- Resource 
Compatible: 
- Culture
- Organisation

Question 9

Jigsaw tool

Answer 9

1- picture overlapping alliances (objective + resources)
2- conceptualise opportunities that combine partner resources
3- determine how to proceed with ideas
4- apply the concept more broadly