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Copyright 2012
Thomas Burky
Why Develop Partnering Relationships and How Do I Manage Them?
Very few businesses have the resources required to develop and field a product on their own
Partnering is a force multiplier that can be applied to many business areas
Leverages strength and competency of diverse businesses
Increases market intelligence
Spreads risk across multiple businesses
Partnering is part of Product Management discipline
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Develop descriptions of competencies in the value network that have well defined handoffs or interfaces
Conversion of raw material into basic components
Assembly of subsystems
Integration of subsystems into product or product components
Integration of hardware and software
Marketing
Sales
Distribution
Installation / Service
Decommissioning or recycling
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Generate a rough estimate for the business volume associated with each business segment
Generate a rough estimate for the product development effort associated with each segment Market assessment
R&D
Manufacturing engineering (product and packaging)
Transition to production
Quality assurance
Installation / Delivery
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How much of the development can you afford to undertake?
What are the resources available to you? Staff Facilities / Equipment Enabling technology Defendable IP Capital Market position / knowledge Time to market
What is the risk/reward of retaining control over each segment versus partnering?
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These will be segments where the previous criteria are not appropriate for your organization
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Have key product features (enabling technologies) that will allow them to really boost their part of your product
Share your ethics and culture You need to be able to get along with them at the
working level regardless of the size of the organization
Are respected in the marketplace If they are embroiled in lawsuits with their partners, this
is not a good harbinger for your relationship
Typically are not direct competitors
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Approach these prospective partners one at a time with the non-proprietary, rough business case to gauge their reaction
Allow time for them to digest and understand the impact of what you are proposing in terms of the product and their segment of the value network
If they don’t bite on the opportunity, then part amicably and move on to another partner They may come into play at another time or may
reconsider the opportunity later
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As the relationship develops, expose them to more of the picture so that they understand their part and how they fit
Start slowly with non-binding agreements and as you gain trust for one another work towards a contractual agreement for co-development and production with the business segments carefully defined
Don’t get your legal department directly involved too early Wait until the trust is there and the business principals
are in general agreement
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As the relationship matures: Update the business plan for the product as new
information becomes available
Be prepared for this because information can flow very quickly sometimes!
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One unintended consequence of having good partners is that you, as a team, may decide to abandon the development Negative market or technical feasibility information
results from the team analysis
May be a natural consequence of broader perspective that partners will provide as part of their contribution
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It’s OK to kill a product development if it is does not meet the expressed market need or is not technically feasible It’s better to “fail” when it is small and survivable
Don’t completely disband the team or the interaction
You have identified good companies that you may be able to partner with on other opportunities
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Greater resources for market assessment and product development
Better business intelligence and decision making
More market power Agility
Speed
Impact
Reduced overall risk (everyone invests)
Reward is divided equitably (everyone gains)
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