Harvard Case - The KLM Approach to Alliances
"The KLM Approach to Alliances" Harvard business case study is written by Africa Arino, Pinar Ozcan, Jordan Mitchell. It deals with the challenges in the field of Negotiation. The case study is 23 page(s) long and it was first published on : Oct 7, 2008
The main protagonists of the case study are:
- Dr. Susan Coleman, President of Fern Fort University
- Dr. Mark Johnson, Dean of the College of Arts and Sciences
- Dr. Sarah Jones, Dean of the School of Business
- Dr. David Smith, Dean of the School of Education
3. Analysis of the Case Study
The case study highlights several key challenges that Fern Fort University has faced in forming and managing strategic alliances. These challenges include:- Lack of a clear and consistent strategy for forming and managing alliances
- Difficulty in identifying and assessing potential partners
- Challenges in negotiating and structuring alliance agreements
- Lack of effective communication and coordination between partners
To address these challenges, Fern Fort University should adopt a collaborative approach to forming and managing strategic alliances. This approach should be based on the following principles:
- Core competencies: Fern Fort University should focus on forming alliances with partners that have complementary core competencies. This will allow the university to leverage its strengths and weaknesses to create a more competitive offering.
- Mutual benefits: Fern Fort University should seek to form alliances that create mutual benefits for all parties involved. This will help to ensure that the alliance is sustainable over the long term.
- Open communication: Fern Fort University should foster open and transparent communication with its alliance partners. This will help to build trust and understanding, and it will make it easier to resolve conflicts.
4. Recommendaations
Based on the analysis of the case study, we recommend that Fern Fort University take the following steps to improve its approach to forming and managing strategic alliances:- Develop a clear and consistent strategy for forming and managing alliances. This strategy should outline the university's goals for forming alliances, the types of partners it is interested in, and the criteria it will use to evaluate potential partners.
- Identify and assess potential partners. Fern Fort University should conduct a thorough assessment of potential partners before entering into an alliance. This assessment should include an evaluation of the partner's core competencies, financial stability, and cultural fit.
- Negotiate and structure alliance agreements carefully. Fern Fort University should take the time to negotiate and structure alliance agreements carefully. These agreements should clearly outline the roles and responsibilities of each party, the terms of the alliance, and the dispute resolution process.
- Foster open communication and coordination between partners. Fern Fort University should establish regular communication channels with its alliance partners. This communication should be open and transparent, and it should cover all aspects of the alliance relationship.
5. Basis of Recommendaations
Our recommendations are based on the following considerations:- Core competencies and consistency with mission: Our recommendations are consistent with Fern Fort University's core competencies and mission. By focusing on forming alliances with partners that have complementary core competencies, the university can leverage its strengths and weaknesses to create a more competitive offering.
- External customers and internal clients: Our recommendations will benefit both external customers and internal clients. External customers will benefit from the university's expanded reach and impact. Internal clients will benefit from the university's increased access to resources and expertise.
- Competitors: Our recommendations will help Fern Fort University to compete more effectively with other universities. By forming strategic alliances, the university can create a more competitive offering and expand its market share.
- Attractiveness ' quantitative measures if applicable (e.g., NPV, ROI, break-even, payback): Our recommendations are financially attractive. The university is likely to see a positive return on investment from its strategic alliances.
- Are all assumptions explicitly stated (e.g., needs, technology trends)' Our recommendations are based on the following assumptions:
- The university will be able to identify and assess potential partners effectively.
- The university will be able to negotiate and structure alliance agreements carefully.
- The university will be able to foster open communication and coordination between partners.
6. Conclusion
By adopting a collaborative approach to forming and managing strategic alliances, Fern Fort University can position itself as a leader in higher education partnerships. The university can leverage its core competencies, focus on mutual benefits, and foster open communication to create a more competitive offering and expand its reach and impact.7. Discussion
Other alternatives that were not selected include:- A more transactional approach to forming and managing alliances. This approach would focus on short-term gains rather than long-term relationships. It is less likely to be successful in the long run.
- A more centralized approach to forming and managing alliances. This approach would give the university more control over its alliances. However, it could also stifle innovation and creativity.
The main risks associated with our recommendations are:
- The university may not be able to identify and assess potential partners effectively. This could lead to the university forming alliances with partners that are not a good fit.
- The university may not be able to negotiate and structure alliance agreements carefully. This could lead to the university being locked into unfavorable terms.
- The university may not be able to foster open communication and coordination between partners. This could lead to conflict and mistrust.
To mitigate these risks, the university should take the following steps:
- Conduct a thorough due diligence process before entering into an alliance. This process should include an evaluation of the partner's core competencies, financial stability, and cultural fit.
- Negotiate and structure alliance agreements carefully. The university should take the time to understand the terms of the agreement and to ensure that it is fair to all parties involved.
- Establish regular communication channels with alliance partners. This communication should be open and transparent, and it should cover all aspects of the alliance relationship.
8. Next Steps
The university should take the following steps to implement our recommendations:- Develop a clear and consistent strategy for forming and managing alliances. This strategy should be approved by the university's senior leadership team.
- Identify and assess potential partners. The university should conduct a thorough due diligence process before entering into an alliance.
- Negotiate and structure alliance agreements carefully. The university should take the time to understand the terms of the agreement and to ensure that it is fair to all parties involved.
- Foster open communication and coordination between partners. The university should establish regular communication channels with alliance partners. This communication should be open and transparent, and it should cover all aspects of the alliance relationship.
The university should monitor the progress of its strategic alliances on a regular basis. This will help to ensure that the alliances are meeting the university's goals and objectives.
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Case Description
When it teamed up with Northwest Airlines of the US in 1989, KLM became Europe¿s first airline to begin a major cross-border airline alliance. What followed was a series of pan-continental alliances resulting in the formation of Star Alliance, oneworld and Skyteam. This case study highlights the main milestones in the development of KLM's major alliances focusing primarily on Northwest with additional details on relationships with Kenya Airways, China Southern and smaller airlines. It covers the airline industry, KLM's history of alliances and merger attempts, the Air France-KLM merger and KLM's current approach to alliances.
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