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Exploitation with strategic alliances: Within Elektor International Media

Baeschnitt, B.W.R. (2010) Exploitation with strategic alliances: Within Elektor International Media.

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Abstract:In this study three forms of strategic alliances to exploit the Elektor Wheelie are explored: joint venture, outsourcing, and licensing. The management team of Elektor is questioned about what implications will occur for the organization and what the consequences for costs are, when following the created forms of alliances. A model is created where is indicated where investments, costs, and savings will occur when following a certain form of strategic alliance per business function. The information presented in the results and the model require that Elektor should invest in most business activities when following the created form of alliance for outsourcing. The created form of alliance joint venture requires fewer investments in business activities than outsourcing. Licensing requires the least investments in business activities. When Elektor engages in the joint venture form of alliance, the main implications for the organization are the need for employees, it-­‐systems, buildings, and extra knowledge for different business activities. Within the outsourcing form of alliance these implications also apply, in addition to this, promotional channels should be created and a dedicated product manager that manages the exploitation should be recruited. Main implication for the organization when following the form of alliance for licensing is that legal and management capabilities must be acquired to manage the license contract(s). This study explores how business activities and functions related to the Elektor Wheelie are performed currently, and how they will be performed when following a certain form of strategic alliance. This information delivers the implications for the organization and consequences for costs per form of alliance. However, before Elektor can create a strategic alliance to exploit the Elektor Wheelie, it should create a competitive strategy and choose in which markets it wants to engage. The overall strategy should direct the choice for a form of strategic alliance. Elektor should be able to determine which form(s) of strategic alliance(s) fit their strategy. As a result of this selection, Elektor can create more specific information in relation to implications for the organization and consequences for costs based on the created model. The model will guide Elektor’s search for specific implications and consequences, because a first explorative step in determining the implications and consequences is done in the existing model. Following the model, Elektor should indicate specific implications for the organization per business activity and, as a result of that, create specific information about consequences for costs. After creating a specific picture per business activity Elektor could compare the specific information per form of alliance to determine rates of investments, costs, and savings. Currently, the information in the model does not represent specific information about investments, costs, and savings in monetary terms, but only indicates in which business activities and functions investments should be made, costs will arise, and savings made, when following a certain form of alliance. When Elektor has determined their strategy for exploiting the Elektor Wheelie it should also create understanding about how revenue can be created. Literature about revenue creation states three ways of creating revenue. First, revenue can be created through directly selling the Elektor Wheelie to customers. Second, Elektor could license some other party to exploit the Elektor Wheelie and agree a royalty to create revenue. Third, ownership of the technology can be transferred from Elektor to an other party where a royalty and/or a lump-­‐sum can be agreed. When Elektor has established its strategy to exploit the Elektor Wheelie and determined which forms of strategic alliances fits the strategy, it should also create information about how much revenue can be created with a certain form of revenue creation that fits the preference for certain forms of alliances. When Elektor has specific information about investments, costs, savings, and potential revenue per form of strategic alliance it could decide which form will create the most benefits for Elektor. Master thesis B.W.R. Baeschnitt September 2010 6 In appendix two a practical tool fur further steps is created and in appendix three a business case is worked out to show the working of the model when following further steps.
Item Type:Essay (Master)
Elektor International Media
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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