Build, Borrow, or Buy. Laurence Capron
Чтение книги онлайн.
Читать онлайн книгу Build, Borrow, or Buy - Laurence Capron страница 4
Название: Build, Borrow, or Buy
Автор: Laurence Capron
Издательство: Ingram
Жанр: Экономика
isbn: 9781422143728
isbn:
GLOSSARY OF KEY TERMS
The following terms will appear throughout the book:
Resources: assets that a firm needs to create goods and services for customers; may include physical assets such as plants and equipment; intangible assets such as know-how and intellectual property; or human resources—employees and other internal and external stakeholders who contribute to your business activities.
Strategic resources: resources necessary to reinforce current competitive advantages, to lay the groundwork for future advantage, or to do both.
Existing resources: resources a firm currently owns or controls or to which it has established reliable access.
Targeted resources: resources a firm currently lacks and wants for opportunities to create valuable new goods and services for existing and new customers.
Resource gap: the distance between existing and targeted resources.
Selection capability: a firm’s ability to select the appropriate pathways to fill resource gaps.
Build—internal development: changes that a firm undertakes on its own to create value by recombining existing capabilities or developing new ones. Such efforts may involve training internal staff, executing internal product development, hiring new staff, or building new plants. Internal development is the alternative to the three forms of external sourcing: borrowing via contracts, borrowing via alliances, and buying (acquisition).
Build—internal exploratory environment: an independent space where teams—working either as Skunk Works or as formally chartered, independent units—can experiment with new ideas, resources, and business models. An exploratory approach can be valuable as a way of buying time to learn about uncertain opportunities.
Borrow—contract: arm’s-length agreements to buy existing products or services from third parties. Such arrangements include purchasing outright off-the-shelf technologies and services; in- or out-licensing the use of specialized knowledge sources, software, and services; basic market agreements; and consulting contracts.
Borrow—alliance: ongoing collaborative partnerships with other firms or institutions (e.g., a university). In an alliance, two or more partners agree to commit resources to work together for a period while retaining strategic autonomy. Examples include equity and nonequity joint ventures, R&D and marketing alliances, corporate venture capital investments, multiparty consortia, franchises, and detailed outsourcing agreements. Alliances may involve relatively simple agreements or far more complex relationships, including multistage contracts, cross-investments, and complicated rights agreements. All forms of alliances involve ongoing interactions between independent actors that commit money and effort to sustain work over the duration of the agreement. The partners’ independence means that they each have strategic autonomy; one firm cannot force its partners to do something.Alliances typically are guided by formal contracts, but all contracts are inevitably incomplete in the sense that they cannot fully specify all possible future events.
Buy—acquisition: cases in which a firm purchases at least a controlling interest in another firm to obtain unfettered use of its resources. Acquisitions provide unified strategic direction for both the buyer and the target firm. Buyers sometimes continue to operate a target firm as an independent entity, at least initially, but have the right to integrate people and other resources across the two firms to combine operations and cocreate new resources. Acquisition might mean purchasing entire firms or individual business units from multi-unit corporations.
Divestiture: the sale of business units, product lines, and major assets.
The Resource Pathways Framework
Business ecosystems change constantly. Opportunities come and go quickly. The race is won by those most agile and swift. To compete and grow, companies worldwide must regularly expand or reinvent their resources. Media businesses need new digital offerings, retail banks must add Internet banking services, automakers face pressure to offer green technologies, food companies’ customers demand more-healthful products, and pharmaceutical firms need to constantly absorb the fruits of biomedical research. Indeed, there is hardly a sector in which change is not a permanent wild card.
The pace of this market-driven, technological, regulatory, and competitive ferment requires that companies continuously analyze and address the gaps in their existing knowledge and skills. Inevitably, these gaps present leaders with important choices.
Closing those gaps is an unending business challenge. Companies face a dizzying diversity of expert skills and knowledge sources and the growing global competition to acquire them. This competition spans both the developed world and the fast-growing emerging markets. More and more, firms find themselves navigating a global expanse of evolving geopolitical and institutional boundaries, a reality that affects new entrepreneurial businesses and deep-pocketed, established companies alike.
But no matter their size or pedigree, firms seeking to bridge resource gaps have a limited number of options: they can innovate internally (build); enter into contracts or alliances and joint ventures (borrow); or merge or acquire (buy). This trio of straightforward categories masks a complex mix of considerations that make selection difficult and outcomes uncertain. Articles in the business press highlight businesses’ frequent failure to innovate successfully, to sign contracts or forge alliances that remain harmonious and productive, or to realize the predicted synergies of a seemingly potent acquisition.
Our research and experience have found that companies of all kinds across the globe struggle to find and manage the resources critical for their future success. Failure to obtain new resources has two root causes. First, and most visibly, firms often struggle to implement the paths they have chosen for obtaining resources; second, and less well understood, the paths chosen are often the wrong ones.
Because each path presents many difficulties, executives must understand when one path makes more sense than another. Indeed, choosing a wrong path will, in itself, make implementation more difficult and can lead to the implementation trap. In this trap, the firm fails because it tries harder and harder to implement the wrong way of obtaining key resources.
Our core message throughout this book is simple: firms that learn to select the right pathways to obtain new resources gain competitive advantages. Conversely, firms that do not carefully weigh competing paths, but instead dutifully replicate a preferred past method—no matter how diligently they pursue it—will often stumble and fail. They will lose ground to firms that pursue more disciplined approaches of reviewing, selecting, and balancing the different resource-development paths. (“A Tale of Two Deals” highlights the advantages and disadvantages of various pathways.)
A TALE OF TWO DEALS
Selection Mistake Meets Selection Success
The 2002 purchase of the Compaq Computer Corporation by Hewlett-Packard (HP) embodies a tale of two selection processes—one successful and the other not.
At the time of the $25 billion deal, HP’s acquisition of Compaq was highly controversial. Yet, despite many predictions of СКАЧАТЬ