Chapter summaries

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Chapter summaries
Major company cases discussed in this chapter
All Roads Lead to London
The Introduction to “Network Advantage” explains how alliances help firms achieve competitive advantage. It also explains that companies’ cooperative strategies fail if they only focus on individual alliances and overlook the benefits of information, cooperation and power inherent in the broader network of alliances. The chapter includes the summary of key concepts used in the book.
Chapter 1
Network Advantage: Making the Stealth Bomber
Chapter 1 lays out the principles of network advantage and introduces the “three degrees” framework that helps the readers to benefit from individual relationships, alliance portfolios and network status. It examines how this framework applies to explain early failure and later success in the alliance network that produced a Stealth Bomber. Northrop
Chapter 2
Comparing Network Advantage: Sony versus Samsung
Chapter 2 is a case study that examines three degrees of Sony and Samsung’s alliance networks. Even though Sony and Samsung formed ties with complementary and compatible partners, their alliance portfolios and status were different. Samsung’s alliance portfolio matched its industry and strategy more than the Sony’s portfolio. Sony also had high internal communication barriers. All of these factors prevented Sony from achieving network advantage. Sony
Chapter 3
The First-Degree Perspective: Strengthening the Foundation of Network Advantage
Chapter 3 examines the rationale for choosing individual alliance partners and for continuing collaboration with existing partners. It gives a model for how to assess the partner’s strategy, resources, organization, and culture fit. Moet Hennessy-Louis Vuitton
Chalhoub Group
Philips Electronics
Chapter 4
The Second-Degree Perspective:
Understanding the Alliance Portfolio Configurations that Deliver Network Advantage
Chapter 4 is the first step up from analyzing alliances one by one to seeing them as a hub and spoke or an integrated portfolio. This chapter introduces the importance of connections between the firm’s alliance partners. Such connections will influence the nature of a firm’s innovation. Hub and spoke portfolio will yield more radical innovations than integrated portfolio. The chapter contains examples of firms with different alliance portfolio configurations and discusses how the portfolios affected their strategies and performance. It also explains the configuration alignment tool, which helps executives determine an optimal structure of their firm’s alliance portfolio. Renesas Electronics
Star Alliance
Continental Airlines
Chapter 5
Evaluating and Changing Your Alliance Portfolio Configuration
Chapter 5 follows up on Chapter 4 and gives ideas for how to change a firm’s portfolio by making it more hub and spoke or more integrated. It provides many examples from different industries on how this can be done. Rabobank
Chalhoub Group
Toronto Maple Leafs
Sberbank of Russia
Chapter 6
The Third Degree Perspective: Achieving the Status Advantage
Chapter 6 explains how firm status is influenced by its network and especially by the status of its partners. It also explains the benefits of high status for getting information, cooperation, and power. The chapter gives examples of how firms with high and low status make the most out of their situation. Apple
Chapter 7
Assessing and Increasing Your Status: Extracting Energy from the Waves
Chapter 7 gives a tool for assessing the status of any firm. This chapter explains a set of actions that help a low-status firm increase its status. Floating Power Plant
Chapter 8
Maximizing Network Advantage: Designing Your Alliance Portfolio Strategy
Chapter 8 discusses how executives can assess their firm’s current alliance portfolio and evaluate opportunities for making changes to the portfolio. This chapter takes into account that not all firms can design a portfolio around them, but instead may benefit from joining the portfolio of another firm. The chapter introduces a tool that can help participants think whether they need to build their own alliance portfolio or join the portfolio of another firm. Biocon
Chapter 9
Recognizing Patterns: Two Alliance Portfolio Building Styles
Chapter 9 discusses how firms develop styles of building their alliance portfolios. These styles can be helpful when they match the firm’s strategy and its environmental conditions, but also can also hinder competitive advantage when the firm’s strategy or its’ environment change. The chapter gives examples of firms that use specific styles, and of how firms from developed versus developing markets differ in their portfolio building styles. Ford
Advanced Risk Machines (ARM)
Chapter 10
Management Practices to Sustain Network Advantage
Chapter 10 discusses how the firms should organize their internal communication and knowledge sharing to benefit from their alliance portfolios. The chapter contains a tool that helps executives generate new business ideas by combining resources and knowledge from different alliance partners. Discussions around this tool can help facilitate communication and knowledge sharing among executives responsible for alliances and partnerships. Philips Electronics
AB InBev
Douwe Egberts/Sara Lee
Appendix 2
The toolbox
This chapter contains the summary of all the tools which we introduced in this book.