What is a Strategic Distribution 
       Alliance?
          …when two or more organizations have 
          a connection that cause them to 
          function according to a perception of a 
          single interest whereby the connections 
          that bind the organizations are:
           –Enduring
           –Substantial
           –Cut across numerous aspects of each 
             business
                                              
       Establishing Strategic Alliances
       Three Areas of Consideration – “FIT”
                  •  Chemistry Fit
                  •  Operations Fit
                  •  Strategic Fit
                     Reference:
                       Lynch, Robert P., 1993. Business Alliances Guide: The Hidden  Competitive Weapon -- How to plan, 
                                  negotiate, and manage  strategic partnerships for increased corporate profits.
                                               
         Establishing Strategic Alliances 
         Corporate “FIT”
                       CHEMISTRY FIT:
                          A measure of the quality of the 
                          relationships among the people involved 
                          in operating the alliance
                            • A fool may be known by six things:
                                 1.Anger without good cause
                                 2.Speech without profit or direction
                                 3.Change without progress
                                 4.Inquiry without object
                                 5.Putting trust in a stranger
                                 6.Mistaking foes for friends.
                                                                   -- Arabian Proverb
                                                             
       Establishing Strategic Alliances 
       Corporate “FIT”
                   OPERATIONS FIT
                     “Some executives fall into 
                     their own trap by assuming 
                     that a good strategic “fit” 
                     implies a good operational 
                     fit.”
                     E.g.: Olivetti and AT&T
                                              
         Establishing Strategic Alliances 
         Corporate “FIT”
                      STRATEGIC FIT:
                      – Looks at STROI to build strategic synergy 
                         whereby the weaknesses of one company 
                         are offset by complementary strengths of the 
                         other.
                         Thus, strategic direction is similar while 
                         operational strength and weaknesses are 
                         dissimilar.
                      – STROI = Strategic Return On Investment
                          • measures: Market Strength, Innovative Capacity, 
                            Financial Gain, Organizational Capability, and 
                            Competitive Advantage.