Question

Some argue that at a 30%–70% failure rate (depending on different studies), strategic alliances and networks have a strikingly high failure rate and that firms need to scale down their alliance and network activities. Others suggest that this failure rate is not particularly higher than the failure rate of new entrepreneurial start-ups, internal corporate ventures, new products launched by single companies, and M&As. Therefore, such a failure rate is not of grave concern. How would you join this debate?

Answer 1

We agree that failure rate of strategic alliances and networks is very high. We believe following are some of the factors that lead to failures :

- In some cases it takes long time to just workthrough the consent to shape a strategic partnership

- In the present increasingly complex world, where mastery is frequently increased through strategic connections, this isn't unexpected.

- Notwithstanding, what was unforeseen was that albeit strategic partnerships were evaluated as significant, practically half detailed high disappointment rates (disappointment pace of 60% or more).

- Also apparently the key issue is identified with an absence of governance, as just 33% of the respondents showed that they had a proper system for partnerships.

- Compelling governance of strategic alliances begins with a comprehension of who claims the relationship advancement ability inside the firm. While numerous capacities may have alliances, there should be a pioneer who builds up the structure, procedures, and estimation frameworks for how the organization will approach, structure, create, oversee, and survey partnerships

- This implies someone in upper administration must oversee or give oversight of the advancement of the association's capacity. Distinguishing who the ideal individual is might be troublesome.

- The non-attendance of a proprietor prompts a few issues in creating effective partnerships.

- Without a pioneer and devoted assets, the outcome is an absence of a strategic arrangement.

- An inability to thoroughly consider the targets, adjust on win-win results, concur on resourcing and duties over the gatherings, and settle on key achievements and checkpoints can prompt a relationship that mulls after some time.

- However we also believe that it is important to create strategic plans. Creating one for a strategic partnership can help on a few fronts. To start with, it can assist you with driving arrangements between the two organizations just as inside your association. Formalizing targets, objectives, systems, achievements, and measures assists with overseeing desires and give an establishment to meeting those desires. Without formalization, there is a solid probability that someone in the partnership will be baffled.