Collaboration-A Cooperative arrangement in which two or more parties work jointly towards a common goal.

2. Collaboration or Alliance
• Collaboration-A Cooperative arrangement in which two or more parties
work jointly towards a common goal.
• Example:
The alliance between Phillips and Sony to develop , produce and
commercialize the compact disc (CD).

3. Relationship between collaboration and innovation
Almost all innovation demand some form of collaborative arrangement for
• Development
• Commercialization or
• Acquiring new skills/technologies.
Collaboration is an essential aspect of innovation because it
• Enables the spread and novel combination of ideas
• Spreads risk and
• Propagates skills.

4. Relationship between collaboration and innovation
• Collaboration underpins the value generated by clusters and networks
of firms. These clusters and networks create value by sharing
specialized investments, facilities, scientific capabilities and practical
skills. They also generate knowledge spillovers where knowledge is
spread to other businesses.

5. Why collaborate?
•To reduce the cost of technological development
•To reduce the risk of development or market entry
•To achieve scale economies in production
•To reduce the time taken to develop and commercialize new products
•To promote shared learning
•To be more innovative in product development
•To broaden product range
Example:
Developing the Jaguar XK8 Ford collaborated with Nippondenso of
Japan and ZF of Germany.

6. Is collaboration for You?
Ask yourself
What are yours goals? What do your customer need?
Can you achieve your goals alone?
Would collaboration help you compensate for your weakness?
If collaboration is needed, move on to:
What strength you have?
What do you expect from your partners?

7. Types of collaboration
Strategic Alliance
Subcontracting
Merger
Joint Venture
Innovation Networks
Technology Licensing
Research Consortia

8. Types of collaboration
1.Strategic Alliance is an agreement between two or more
independent firms which temporarily combine resources and efforts to reach
their goals.
For example, alliance between Microsoft and Yahoo. The intention of the
alliance was to use Microsoft’s Bing as a search engine on Yahoo’s Website.
Reasons for strategic alliance
To ensure continuous improvement
To compensate for in house weakness or technological gaps
To establish new product lines
To successfully enter new markets
To reduce New product development costs, risks and time.

9. Types of collaboration
2.Subcontracting
• Subcontracting means assigning
an organization’s part of the
tasks under a contract to
another party. To reduce lead
time.
3.Merger
Merger is an agreement in which the
ownership of companies or their
operating units are transferred or
consolidated with other. To share
resources.

10. Types of collaboration
4. Joint Venture
• It is established when the
parent companies establish a
new child company.
For example, Bkash is child company
of Brac Bank, Bill and Melinda Gates
Foundation, Ant Financial.
• 5.Innovation Networks
Networks include groups of firms that
share R&D goals related to products,
services, processes or business
models.

11. Types of collaboration
6. Technology Licensing
Agreement whereby an owner of a technological intellectual property
allows another party to use, modify, and/or resell that property in exchange
for payment of a fee based on sales. For technology acquisition.
7. Research Consortia
Research consortia is formed by manufacturing companies often with the
support of govt. to conduct shared research on new technologies. Formed to
share expenses and resources, to pool talent and expertise, to compete
globally.
Govt. supported research consortia (Kumaia) have been common in Japan
since the 1960’s.

12. Effect of Technology and Organization
• The characteristics of organization include:
 Corporate strategy of the firm
Capabilities and existing technical know how
Culture of the firm
Comfort with new technology

13. The characteristics of the technology include:
 Competitive significance of the technology
Complexity of the technology
Codifiability
Credibility potential

14. Characteristics of the organization
Organizational factors Acquisition mechanism Rationale for decision
1. Corporate strategy:
 Leadership
 Followership
In house R&D/ equity acquisition
License/ supplier relationship/ contact
Differentiation, 1st mover
proprietary technology
Low cost imitation
2. Fit with competencies:
 Strong
 Weak
In-house R&D/any
Contract/license/consortia
Options to leverage competencies
Access to external technology
3. Company culture:
 External focus
 Internal focus
Various
In-house/joint venture
Cost effectiveness of source
Learning experience
4. Comfort with new technology:
 High
 Low
In-house corporate/university
License/customers and suppliers/
consortia
High risk and potential high reward
Lowest risk option

15. Characteristics of the technology
Technological factors Acquisition mechanism Rationale for decision
1. Competitive significance:
 Base
 Key
 Pacing
 Emerging
License/contract/suppliers
In-house R&D/joint venture
In-house corporate/university
University/in-house corporate
Cost effective/secure source
Maximize competitive advantage
Future position/learning
Watching brief
2. Complexity:
 High
 Low
Consortia/universities/suppliers
In-house R&D/contract/suppliers
Specialization of know how
Division of labor
3. Codifiability:
 High
 Low
License/contract/university
In-house R&D/joint venture
Cost effectiveness of source
Learning/acquisition of tacit
know how
4. Credibility Potential:
 High
 Low
Consortia/customer/government
University/contract/license
High profile secure
Cost effectiveness of source

16. Approaches to studying Collaboration
1.Aggregate data Based Approach: examines patterns
within and across different sectors. It provides insights into
how technological and market characteristics affect the level,
type and success of collaborative activities.
2. Structured Case Studies Based Approach: It is usually
within a specific sector, but sometimes across national
boundaries, and provides richer insights into the problems and
management of collaboration.

17. How technology and market affect firm
collaboration
1. Large firms use joint ventures to acquire technology.
Technology oriented joint ventures are tend to increase
with the size of firm, capital expenditure and R&D
intensity
2. Smaller firms use joint ventures for the acquisition of
market knowledge and financial support.
Marketing and distribution oriented joint ventures
increases with firm size and capital expenditure, but is
not affected by R&D intensity.

18. Managing alliances for learning
• Collaboration as a means of accessing market or technological know-
how, or acquiring assets.
• However, Alliances can also be used as an opportunity to learn new
market and technological competencies.

19. The factors which contribute to the success of alliance
• The alliance is perceived as important by all partners
• A collaboration champion exists
• A substantial degree of trust between partners exists
• Clear project planning and defined task milestones are established
• Frequent communication between partners
• The collaborative parties contribute as expected

20. Common reasons for failure of alliance
• Strategic/goal divergence
• Partner problems
• Strong-weak relations
• Cultural mismatch
• Insufficient trust
• Operational/geographic overlap
• Personnel clashes
• Lack of commitment
• Unrealistic expectations

21. Bases of trust in alliances
• Contractual
• Goodwill
• Institutional
• Network
• Competence
• Commitment

22. Thank you