Maturity of A Business and Relationship With Partnerships
As the maturity of a business increases throughout the life cycle of their products, influences the types of alliances that a company holds.
For example, the Research and Development (R & D), usually form early in the product life cycle, while those directed at reducing costs occur, usually when that cycle is advanced.
At all stages of the life cycle of a product, growth based on improved cost/performance. In the initial phase, the performance improvement is the only way possible, given that the product is in a stage of development. A company that focuses on its core competencies needed alliances with companies in other value chains, known as horizontal alliances, to obtain access to relevant complementary skills.
These skills are usually associated with information or R & D (product performance, for example), which is of paramount importance to capitalize on a specific market opportunity.
In the second phase (maturation), the product will need improved performance and reduced costs. Therefore, a company not only need horizontal alliances, but also “vertical” (within the same value chain), with partners who have better economies of scale for certain skills: manufacturing, for example, but also distribution and sales.
In the third phase (maturation), growth will depend on the reduction of product costs. Consequently, the best thing is vertical alliances. Precisely because of the maturity of the product, suppliers can make parts with better economies of scale that a vertically integrated company. These providers have a higher production volume, large number of customers, and invest huge amounts in technology manufacturing processes (that is, precisely, its core competency).
The management of alliances (horizontal or vertical), the number of alliances that develop and the level of integration between partners of alliances, are a balancing act, often guided by cost/performance required that simulants, depends on the position in the product life cycle. But also influenced by other factors: the predictable or not the market, the existence of critical resources and potential to develop and produce in areas outside of core competencies, but with sufficient economies of scale.
Posted in 
Tags: