8
Strategic Alliances and Networks (Fach) / Lecture 7 (Lektion)
- Factors to consider in alliance valuation Fixed Assets Working Capital Expertise Contact Network Brand Names Technology Transfer
- Parameters in Alliance Negotiation Partner A, Licensor, Knowledge Supplier --> Knowledge and Rights, Payments for Finished products <-- Lumpsum Fee, Royalties, Payments for Components Partner B, licensee, Knowledge Recipient
- Advantages of Dividends/Equity Share Direct share in future success, growth and profits of affiliate More valuable as years pass than fixed percentage royalties No expiration (by comparison, a licensing or material supply agreement may terminate)
- Advantages of margins on components or product traded with afiiliate on licensee Margins can be high on property, high tech or branded items less affected by cyclical fluctuations compared to dividends profit margins earned outside affiliate/licensee country jurisdiction, i.e. no convertibility risk transfer pricing advantages
- Advantages of Lumpsum fees and royalties Lumpsum fee provides immediate cash return Royalties are inherently less volatile compared to dividends paid out on uncertain profits royalties earned even if affiliate/licensee's profits are zero Licensing income legally escapes the local tax in the payer's nation Also possible lower tax to the licensor (compared to dividends) All royalties kept by licensor
- Synergy allocation in alliances Motivation: Stabilization Conflict prevention Equity preservation Efficiency gains Incentivation Requirements Acceptance Organizational implementation Fairness Transparency Practicability Functions Fair allocation Mitigation of alliance immanent competition as potential conflict area
- Negotiation Process in context Analysis of strategic fit between companies Analysis of cultural fit between companies identification of goal congruence identification of a primary joint project and its scope Identification of level and nature of contribution expected from each partner agreement on the structure of the alliance and its decision making agreement of termination formula in the event of one or both parties wishing to exit the alliance
- Negotiation process in detail Information gathering about prospective partner (potentially useful in negotiation) Needs assessment: Future-oriented, also directed at the negotiating team Issue identification: Best alternative to a negtotiated position, (BATNA), determine negotiating position Proposal stage: Face-to-face negotiation, first porposal by the other party, open questions, win win flexibility: repackage, increase no of variables exchange concessions: mutual concessions lose the deal, written record, agree on detaisl
Anzeige