Beats by Dre has a newly told story of an alliance partner that did most of the work but lost everything in the process.
Monster, a father and son business (Noel and Kevin Lee) came up with the technology but was severely out negotiated by ts more experienced partner. A great cautionary tale for the study of alliances. I use the “Four C” alliance framework to teach alliances:
- Complementarities. Monster had the engineering chops to design the path-breaking audio. Interscope and Dr. Dre had the marketing expertise and contacts to make them a fashion item. Clearly these complementary capabilities were strong.
- Congruent goals. While they had a strong interest to cooperate, their interests diverged on the issue of who would own the intellectual property, brand, and on how the value would be split.
- Compatibility of the Organizations. The larger and professionalized Interscope had a team of experienced lawyers. Kevin Lee had a BA in engineering. They could work together but not necessarily understand each other.
- Change. Over the course of the alliance Interscope needed Monster less and less. Once the first products were designed and produced, they could hire other expertise to keep the products fresh (much of that was around fashion rather than new technology). This allowed Interscope to shut out Monster altogether.
Contributed by Russ Coff
This is especially revealing given self reports of 4 to 5 minutes per resume. Online profiles get about the same amount of scrutiny with almost 20% of the time spent on the picture — of course this has the potential to introduce significant bias. The other few seconds is spent scanning the current and prior work experience, dates, and education. They do report that well-organized resumes, with clear headers marking the critical information, are rated significantly better. So you teach a strategy class, why should you care? First of all, this is an insight into how imperfect strategic factor markets actually are. In this context, you might ask, how can a firm gain an advantage in hiring talent. A key reason to use this example is that your students will tend to care about the job market and this will instantly get their attention. You could couple this with an exercise where teams of students rank a stack of resumes to identify candidates who might have critical capabilities for a company you are doing a case on (could work with any case where human capital is critical).
The one-atom thick sheets of carbon may one day replace silicon wafers and revolutionize computing and electronics. For example, recent findings suggest that
The current violence in Mexico (Political factor), rains when the trees were blooming and pests (environment) have resulted in poor harvests. The problem is compounded because of the increase in demand from Hispanics in the US, and the growing popularity of Mexican food around the world (social factors). The Florida plantations that used to be the main source of key limes were all but wiped out by hurricane Andrew and citrus canker (environment). Production moved to Mexico because of the weather, but also because legal factors (NAFTA) make it cheaper to import the limes from Mexico than from anywhere else. This explains why lately waiters have been asking if I want lemons or limes with my half and half tea…