Questions and Answers
What is the primary purpose of the chart created by Solvay Pharmaceuticals and Quintiles?
The alliance strategy map was created solely by Solvay Pharmaceuticals.
False
What do the employees want from the alliance according to the chart?
They want trust and transparency.
The scorecards for the themes specify metrics, targets, and initiatives for each _____
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Match the following entities with their corresponding desires in the alliance:
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What percentage of corporate alliances fail?
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All joint ventures yield returns above the cost of capital.
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What management system can help improve alliance management focus?
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The prime reason alliances fail is the way they are traditionally _____.
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What is one benefit of using the Balanced Scorecard in alliance management?
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What are two companies mentioned that utilized the Balanced Scorecard?
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Partnerships and alliances are not a significant part of many companies' business models.
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What is the average cost of bringing new drugs to market?
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Solvay historically selected clinical trials suppliers through a competitive bidding process.
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Who did Solvay choose to perform all stages of the trial process?
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What was a major change that Solvay and Quintiles had to overcome?
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What system did the executives believe would help address the alliance issues?
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The alliance's proponents had to overcome concerns about loss of ______ as more activities got outsourced.
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Match the following teams with their responsibilities:
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What are the five strategic themes identified by the project team?
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The joint clinical team was formed to manage only operational aspects of conducting clinical trials.
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What was the primary goal of the theme teams?
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By what percentage did the alliance reduce total cycle time for clinical studies?
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The balanced scorecard was introduced by Robert Kaplan and David Norton.
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Which of the following was NOT mentioned as an accomplishment of the alliance?
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The alliance saved between €___ to €___ per site.
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What was a significant process improvement mentioned in the document?
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What did the JSC replicate the balanced scorecard process with?
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Infosys constructed relationship scorecards with customers over the span of a year.
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Study Notes
Alliance Management Overview
- Fifty percent of corporate alliances fail, indicating a challenging landscape for partnerships.
- Research by McKinsey & Company reveals that only half of joint ventures provide returns exceeding capital costs.
Importance of Strategic Focus
- Traditional alliances focus on service level agreements (SLAs) related to operational metrics, neglecting strategic objectives.
- Shifting focus from operational performance to strategic commitment can enhance the success of alliances.
Balanced Scorecard (BSC) Application
- The Balanced Scorecard management system helps organizations realign their alliance management approach.
- It encourages a strategic view, moving beyond contractual obligations to collaborative strategy execution.
Case Study: Solvay Pharmaceuticals and Quintiles
- Solvay, a leading pharmaceutical company, and Quintiles exemplify successful alliance management using BSC.
- The partnership aimed to reduce the clinical study cycle time by 40% through enhanced collaboration and integration.
Costs and Risks in Drug Development
- The average cost to bring a new drug to market exceeds $1 billion, making collaboration crucial for success.
- Both companies worked to share development costs while increasing Solvay's capacity to conduct clinical trials.
Governance and Oversight
- A joint oversight committee was established to monitor progress and set milestones for the alliance.
- Effective governance structures are essential for aligning strategic objectives and facilitating timely decision-making.
Overcoming Internal Challenges
- Concerns about loss of control and organizational resistance needed to be addressed for the successful integration of efforts.
- Senior executives from both companies had to champion the alliance strategy to build commitment and mitigate fears.
Summary of Key Benefits
- Collaborations like Solvay and Quintiles can lead to higher productivity, operational efficiency, and faster development cycles.
- The partnership model is an evolving necessity for companies aiming for competitive advantages in complex markets.### Transition to Outsourcing Management
- Solvay aimed to improve efficiency and outcomes by outsourcing clinical trial management to a single partner.
- Chose Quintiles, with a global workforce of 23,000 across 50 countries, as the sole partner for all trial phases.
- Quintiles has been instrumental in the launch of the 30 best-selling pharmaceutical products and nine top biologics.
Strategic Partnership Development
- Transitioned from a transactional relationship to a preferred partnership in 2001.
- Agreement involved consolidating outsourced projects under Quintiles in exchange for price reductions.
- Established a joint clinical team for strategic and operational oversight of clinical trials.
Balanced Scorecard Implementation
- Utilized balanced scorecard tools to address alliance management issues.
- Developed a joint strategy map to align goals and monitor performance based on shared objectives.
- Governance included a Joint Steering Committee (JSC) led by executives from both companies.
Key Strategic Objectives
- Living the Alliance: Build a culture of trust, communication, and leadership while focusing on employee development and IT.
- Collaboration: Foster transparency and optimize resources across both organizations and third parties.
- Speed and Process Innovation: Enhance operational efficiency, improve study startup, and leverage global expertise.
- Growth: Focus on the right product portfolio to drive compound development and investment management.
- Value for Both: Generate joint value by executing shared activities and achieving mutual goals.
Governance Structure
- JSC responsible for overall governance and leadership in alliance strategy.
- Joint Development Committee oversees progress and milestones in clinical trials.
- Project Team aids in creating strategy maps, objectives, and scorecards.
Strategy Map Overview
- Visual representation of strategic objectives showing causal linkages between levels of organization.
- Defines the objectives leading to stakeholder outcomes and overall business value.
- Stakeholder focus identifies key groups, including patients, payers, prescribers, and regulators.
Continuous Improvement and Adaptation
- Regular updates to objectives allow for tracking achievements and identifying performance issues.
- Engaged in dialogues to foster trust and enhance collaboration throughout the partnership.### Collaboration in Managing Alliances
- Collaboration theme: Key areas include developing transparent cost drivers, managing resources, leveraging services from existing organizations, and utilizing third parties for excellence.
- Executing the strategy requires trust at all organizational levels, aligning incentives, and implementing a comprehensive IT strategy to enhance collaboration speed.
Values Driving Collaboration
- Core values include prioritizing patients, focusing on science and innovation, effective communication, trust, respect, support, and making a difference.
Importance of Strategic Clarity
- Creating a strategic map and scorecard fosters buy-in and understanding among participants, facilitating negotiation of targets and performance metrics.
- Candid dialogue among alliance employees enhances transparency and trust.
Scorecard Implementation
- The collaboration scorecard includes objectives like developing transparent processes, managing resources effectively, leveraging existing services, and engaging third parties.
- Initiatives and metrics focus on driving improvements, such as developing a viable plan for regulatory approval and increasing stakeholder engagement.
Continuous Improvement and Governance Structure
- Regular meetings and feedback loops with stakeholders maintain progress and address emerging relationship issues.
- A governance structure comprising theme leaders oversees cross-functional initiatives and ensures alignment with strategic priorities.
Achievements from Collaborative Efforts
- Implementing new processes and enhancing communication led to significant reductions in cycle time for clinical studies, enhancing speed to market.
- The alliance halved the number of nonperforming recruitment sites, yielding significant cost savings per site.
- Overall, a 40% reduction in clinical study cycle time accelerates product delivery, translating to considerable cost efficiency and operational effectiveness.
Historical Context
- The balanced scorecard, introduced by Kaplan and Norton, has transformed corporate strategy execution, allowing for clearer alignment of strategic objectives throughout the organization.
- Establishing shared objectives through the strategy map empowers teams to make informed strategic and scientific decisions earlier in the development process.
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Description
Test your knowledge on the chart created by Solvay Pharmaceuticals and Quintiles regarding corporate alliances. Understand the primary purposes, employee desires, and outcomes associated with these partnerships. Additionally, explore the statistics of corporate alliance failures for a comprehensive overview.
