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AMN - Detailed Summary of all Lectures, Book and Articles! 2024
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Detailed Summary for master course Alliances, Mergers and Networks of the master Business Administration Strategy and Organization.
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AMN - SummaryAlliances, Mergers, and Networks
Information about the exam.................................................................................................. 3
Week 1..................................................................................................................................... 4
Lecture 1............................................................................................................................ 4
Week 2..................................................................................................................................... 9
Lecture 2............................................................................................................................ 9
Chapter 1: Strategic alliance management...................................................................... 23
Chapter 2: Alliance formulation........................................................................................ 26
Chapter 3: Alliance partner selection............................................................................... 30
Chapter 4: Alliance negotiation........................................................................................ 32
Chapter 5: Alliance design............................................................................................... 34
Chapter 6: Alliance launch............................................................................................... 36
Chapter 7: Alliance management..................................................................................... 38
Chapter 8: Alliance evaluation..........................................................................................39
Chapter 9: Alliance termination........................................................................................ 41
Week 3................................................................................................................................... 43
Lecture 3.......................................................................................................................... 43
Chapter 10: Supplier alliances......................................................................................... 53
Chapter 11: Learning alliances.........................................................................................54
Chapter 12: Co-branding alliances...................................................................................56
Chapter 13: International alliances...................................................................................57
Chapter 14: Asymmetrical alliances................................................................................. 59
Chapter 15: Cross-sector alliances.................................................................................. 61
Chapter 16: Coopetition alliances.................................................................................... 62
Chapter 24: Alliances mindset..........................................................................................64
Week 4................................................................................................................................... 66
Lecture 4.......................................................................................................................... 66
Article 1 - Feldman, E. R., & Hernandez, E. (2022). Synergy in mergers and acquisitions:
Typology, lifecycles, and value. Academy of Management Review, 47(4), 549-578........74
Article 2 - Haspeslagh, P.C. and Jemison,D.B. (1991, Ch, 1-4). Managing Acquisitions:
Creating Value Through Corporate Renewal. New York: Free Press; Collier Macmillan
Canada; Maxwell Macmillan International........................................................................79
Chapter 1....................................................................................................................79
Chapter 2....................................................................................................................81
Chapter 3....................................................................................................................85
Chapter 4....................................................................................................................88
Week 5................................................................................................................................... 92
Lecture 5.......................................................................................................................... 92
Article 1 - Haspeslagh, P.C. and Jemison,D.B. (1991, Ch, 8). Managing Acquisitions:
Creating Value Through Corporate Renewal. New York: Free Press; Collier Macmillan
1
, Canada; Maxwell Macmillan International......................................................................105
Chapter 8..................................................................................................................105
Week 6................................................................................................................................. 111
Lecture 6......................................................................................................................... 111
Article 1 - Hernandez, E., & Menon, A. (2021) Corporate Strategy and Network Change.
Academy of Management Review, 46, 80–107..............................................................125
Chapter 17: Multi-partner alliances................................................................................ 132
Chapter 18: Alliance portfolio......................................................................................... 133
Chapter 19: Alliance networks........................................................................................135
Examples of exam questions............................................................................................138
Question 1 (reproduction)...............................................................................................138
Question 2 (application)................................................................................................. 138
Question 3 (synthesis)....................................................................................................139
Question 4 (synthesis)....................................................................................................139
Appendix 1: Decision-making steps Alliances................................................................140
2
,Information about the exam
Types of question
Knowledge Reproduction
Ability to understand, memorize, and reproduce key AMN concepts and frameworks such as:
● development frameworks including the steps and the content of steps [slides, book,
articles].
● theoretical perspectives (e.g., RBV, TCE, IT, RDT, network) including assumptions,
concepts and explanation [slides, book].
● decision-making steps [slides, book].
● synergy creation [slides, book, articles].
● “contingencies” (e.g., alliance\M&A types) [slides, book, articles].
Knowledge Application
Ability to apply the acquired knowledge about key concepts and frameworks to different
cases.
Knowledge Synthesis
Ability to synthesize the acquired knowledge, build and present arguments concerning AMN
perspectives and approaches.
Theoretical perspectives
● Applying theoretical perspectives to analyze, interpret, and guide decisions at
different stages of the alliance or M&A process.
● For instance, you can draw upon multiple theoretical perspectives to justify why
certain types of alliances are chosen, evaluate the negotiation process, or assess the
post-M&A integration.
● However, some perspectives can be more relevant than others depending on the
context.
● For example, the application of the inter-organizational learning perspective, based
on the idea that knowledge transfer between organizations is crucial to achieving and
maintaining a competitive advantage, may offer more meaningful insights when
explaining the formation of an R&D alliance than when explaining the formation of a
co-branding alliance.
Learning objectives
● a better theoretical understanding of key challenges related to AMNs.
● ability to apply theoretical perspectives to real-life AMN scenarios meaningfully.
● professional and social skills to interact with AMN professionals, especially improving
verbal and written communication.
Extra
● You need to know the decisions to be made in every stage.
● Need to know the key assumptions of every theory.
● Apply every theory to the framework and write it out.
● No alliance mindset.
● M&A evaluation is about the concepts, you do not need your calculator.
3
,Week 1
Lecture 1
A strategic alliance = an agreement between two or more autonomous and
independent firms designed to achieve mutual and individual objectives by sharing
and/or creating resources.
A merger = an agreement between two independent (typically similar-sized)
firms to form a single larger one (i.e., merger of equals) designed to grow through the
access to the resources and infrastructures of each partner.
An acquisition = an agreement through which one firm takes over another
one (or part of it) on which the buyer asserts complete ownership.
A network = a set of inter-organizational direct and indirect linkages between
multiple parties.
The amazon Story
Phase 1: E-commerce Pioneer (1995-2005).
● Online bookstore → everything store
● Infrastructure development
● Marketplace launch
Phase 2: Tech Innovation (2006-2015).
● Amazon Web Services (AWS) launch
● Kindle revolutionizing
● Prime ecosystem
Phase 3: Omnichannel Giant (2016-present).
● Grocery entry
● Healthcare entry
● AI leadership
Phase 1: E-commerce Pioneer (1995-2005) – Selected Events.
● Geographic expansion
○ Acquired Bookpages (UK), Telebook (Germany), Joyo (China).
● Product expansion
○ Entered the entertainment sector by acquiring IMDb.
● E-commerce leadership
○ Formed a strategic alliance with Borders (traditional book retailer), powering
their website with Amazon's e-commerce platform.
4
,Phase 2: Tech Innovation (2006-2015) – Selected Events.
● Digital reading.
○ 2007 Kindle Launch → 12th Generation (2024).
● Operational excellence.
○ Acquired warehouse robot specialist Kiva (2012, $775M).
● Voice recognition software.
○ Acquired startup Evi (2012, $26M).
■ Smartphone: partnership with Foxconn to produce Fire Phone failed.
■ Smart home echo devices: Alexa.
● Watching the video game industry.
○ Acquired Twitch (2014, $970M).
Phase 3: Omnichannel Giant (2016-Present) – Selected Events.
● Indian retail industry.
○ Termination of the alliance with Future Group due to a dispute over product
discounts.
○ Lost battle to acquire Flipkart: Walmart deal (2018, $16B).
● Grocery entry.
○ Acquired Whole Foods Market (2017, $13.7B).
● Healthcare entry.
○ Haven Healthcare (venture formed by Amazon, Berkshire Hathaway,
JPMorgan Chase) failed.
○ Acquired online pharmacy PillPack (2018, $753M).
● Autonomous vehicle.
○ Acquired driverless car startup Zoox (2020, $1.2M).
Phase 1: E-commerce Pioneer (1995-2005)
Amazon began as an ambitious online bookstore, quickly transforming into the "everything
store." To support this growth, Amazon expanded its infrastructure, acquiring companies like
Bookpages and Joyo to establish a strong presence in key international markets. With the
launch of its Marketplace platform, Amazon created a space where third-party sellers could
reach customers globally, enhancing product diversity and boosting Amazon's status as a
leader in e-commerce. Strategic alliances, like its partnership with Borders, further
established Amazon’s reach in online retail, leveraging its tech platform to support traditional
bookstores.
Phase 2: Tech Innovation (2006-2015)
In this phase, Amazon evolved into a tech powerhouse. It launched Amazon Web Services
(AWS), which would become a cornerstone of cloud computing, helping both Amazon and
countless other companies scale their operations. The launch of the Kindle marked a
revolution in digital reading, allowing Amazon to dominate the e-book market. Meanwhile,
Amazon built out the Prime ecosystem, offering customers fast shipping, exclusive deals,
and streaming services, solidifying customer loyalty and driving significant growth. With key
acquisitions like Kiva for warehouse automation and Evi for voice technology, Amazon
positioned itself as an innovator in logistics and smart tech.
5
,Phase 3: Omnichannel Giant (2016-Present)
In recent years, Amazon has expanded into a true omnichannel giant, leveraging both
physical and digital channels. Its acquisition of Whole Foods marked a significant entry into
groceries, blending physical stores with online shopping convenience. Amazon’s venture into
healthcare, through acquisitions like PillPack and the now-defunct Haven Healthcare, shows
its intent to disrupt traditional industries with a tech-driven approach. Amazon has also
invested heavily in AI, with Alexa leading the smart home market, reinforcing its position in
tech innovation. The acquisition of Zoox, a driverless car startup, signals Amazon’s
commitment to leading in AI and automation, likely with an eye on future logistics and
delivery advancements.
These phases showcase Amazon’s evolution from a simple online bookstore to a globally
integrated tech and retail giant, each phase building strategically on the previous.
What have we learnt from this story?
1. Strategic Alliances for Market Reach: Partnerships, like the one with Borders,
allowed Amazon to leverage established networks, entering new markets and
enhancing its expertise.
2. Mergers and Acquisitions for Growth: Key acquisitions, from IMDb to Whole Foods,
show Amazon’s use of mergers to diversify and build market dominance across
sectors—from entertainment to groceries.
3. Building Networks to Drive Innovation: Amazon’s acquisitions of Kiva and Evi show
how integrating external tech capabilities (robotics, voice recognition) strengthened
its operational network, powering growth in logistics and AI.
4. Long-Term Network Building: Amazon’s ventures into healthcare (Haven, PillPack)
and autonomous vehicles (Zoox) illustrate its strategy to establish new networks in
emerging industries, anticipating future value.
In essence, Amazon’s journey reveals the powerful role that alliances, mergers, and
network-building play in scaling and sustaining business across diverse sectors.
6
,Organizations become increasingly dependent on their external environment.
However, organizations cannot depend only on the market because of:
● Higher transaction costs
● Uncertainty
● Opportunistic behavior
● Information asymmetry
● Asset specificity
● Market power
To survive and grow, organizations need to be able to:
● Borrow: an organization forms alliances with other independent organizations to
achieve mutual and individual objectives.
● Buy: an organization acquires at least controlling interests or merger with other firms
to obtain unrestrained use of their resources.
● Leverage their network of relationships with other organizations (i.e.,
inter-organizational relationships).
Types of strategic alliances
Equity alliances and non-equity alliances.
Equity Alliances
1. Joint Ventures (JV): This is a business arrangement where two or more companies
come together to create a new, jointly-owned entity. Each party contributes assets
and shares the profits, losses, and control of the venture. JVs are typically formed for
a specific project or business activity.
2. Equity Participation: In this arrangement, one company buys a minority stake in
another company, allowing it to participate in its management and strategic
decisions. This type of alliance fosters collaboration without full ownership.
Non-Equity Alliances
1. Franchising: A franchise is a business model in which a company (franchisor)
licenses its brand, business model, and rights to operate to another party
(franchisee). The franchisee pays a fee and often royalties to the franchisor in
exchange for support and brand recognition.
2. Licensing: Licensing is an agreement where one company allows another to use its
intellectual property (such as patents, trademarks, or technology) in exchange for a
fee or royalty. This allows expansion without directly managing the licensed product
or service.
3. Joint Marketing: Companies collaborate in marketing efforts to promote each other’s
products or services. This can increase brand visibility and sales without requiring a
deeper financial or operational partnership.
4. Research and Development (R&D): Two or more companies pool resources,
knowledge, and expertise to conduct research and create new products or
technologies. This type of alliance allows them to share the costs and risks of
innovation.
7
, 5. Joint Production: Companies work together to manufacture products, often to reduce
costs or improve efficiency. By sharing resources, they can increase production
capacity or enter new markets more effectively.
6. Supply Agreement: This type of alliance involves one company agreeing to supply
another with specific goods or services. Such agreements ensure reliable sourcing,
allowing the receiving company to focus on other aspects of its operations.
Types of M&As
1. Horizontal: This type of merger or acquisition occurs when a company acquires
another company in the same industry, typically a competitor. The goal is often to
increase market share, reduce competition, achieve economies of scale, and
enhance market reach.
2. Vertical: In a vertical merger or acquisition, a company acquires another firm that
operates at a different stage of the production or supply chain. This can be a supplier
(backward integration) or a distributor (forward integration). Vertical M&As help
improve efficiency, control costs, and secure supply chains.
3. Conglomerate: A conglomerate merger or acquisition involves the combination of two
companies from completely unrelated industries. This type of M&A allows companies
to diversify their business, reduce risk by entering new markets, and leverage
resources across different sectors.
Potential and risks
8
,Week 2
Lecture 2
Two conclusions:
- No single firm without alliances could survive.
- A lot of these alliances fail.
Meaning of alliance
Definition:
“An alliance is a voluntary, long-term, contractual relationship between two or more
autonomous and independent organizations (i.e. firms), designed to achieve mutual and
individual objectives by sharing and/or creating resources” (p. 2).
An alliance:
● Represent a managerial ‘instrument’, established to attain individual and joint
objectives.
● Consists of two or more firms, which remain independent, who connect voluntarily,
and organize activities through an alliance contract.
● Embodies a transitional entity (i.e. it is designed to end at one point in time).
9
, Why does this (a definition) matter?
This definition matters because it clarifies what alliances are and how they function. It guides
strategic decision-making, showing that alliances are voluntary, temporary, and involve
resource sharing while maintaining each firm's independence. This helps managers
understand alliances as tools to achieve specific goals, manage resources, and plan for the
partnership's lifecycle, ensuring clear expectations and risk management.
An alliance is unique because the companies are still independent from each other. And the
companies could at every moment be discontinuous. There is always a risk that one of the
partners could leave.
A different way of thinking
Reasons for alliance failure!!!
1. Misunderstanding tension between cooperation and competition.
2. Lack of hierarchy/coordination (at the beginning).
3. Misunderstanding of unique challenges.
4. Lack of institutionalization of alliance know-how and know-what.
In short: The overstatement of the promise of value creation versus the understatement of
costs (e.g. coordination, appropriation, learning).
How do we divide the value we created in the alliances?
Cooperation and competition is really important in alliances! While they work together to
achieve shared goals, each company still wants to stay ahead of the other. If this balance
isn't managed well, it can lead to conflicts and mistrust, ultimately causing the alliance to fall
apart.
Misunderstanding tension between cooperation and competition
Transaction approach (Old / competition):
A (alliance) business model based on the onetime sales of a product/service (moving
boxes). [“us vs them’].
Transformation (New / cooperation):
A (alliance) business model based on continuous interaction between organization, partners,
and customers, driving value creation (eliminating the need for a box). [“together”].
Joint venture ^
10
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