Corning Incorporated a Network of Alliances
Brief analysis of Harvard Business School case: Corning Incorporated a Network of Alliances (8/12/1992)
Source: Harvard Business School. Corning, Inc.: A Network of Alliances. by Christopher A. Bartlett, Ashish Nanda. 26 pages. Publication date: Nov 16, 1990. Prod. #: 391102-PDF-ENG.
Describes James Houghton's actions in assuming the role of CEO at Corning in the midst of a recession. Not only must he turn around operating performance, he must also revitalize a demoralized organization and set a new, clear strategic direction. In doing so, the case focuses on the changing role of alliances and partnerships in Corning operations. Increasingly, they are moving from a peripheral role in providing market access interchange for technology, to a more central role at the core of Corning's business. The strategic and organizational challenges this presents are highlighted through some specific decision issues facing Houghton.
Benefits and drawbacks of creating a strategic alliance
- Use of complementary resources and capabilities are complementary and thus achieve objectives that without the U.S. not have been possible.
- Efficient use of capital, achieving a high ROI and efficient.
- Reducing the risks
- Entry into new markets
- A variety of horizontal
- Decentralization of control, lack of business focus
- Dependence on allies and exposure to harm their business, not necessarily in business together. – Such as currency fluctuations, credit rating and so on.
b. Adequacy of Corning's strategy for partnerships
Corning suffered from lack of compliance with business goals resulting from operational efficiencies and lower ability to translate internal innovation capability market successful products. Therefore turned to Corning's strategy partnerships to achieve their business goals.Corning has developed a process of recognition capabilities of potential partners and markets complementary technologies required.
Also, has developed a distributed management capability that enabled business partners conduct a separate business unit. Corning evolved over time organizational skills, managerial, and operational management of business partnerships which enabled Corning to achieve a unique expertise in this field. One criteria for choosing partners could partner to make a quick entry to market.
This is the means by which they have executed the strategic plan. When considering the appropriateness of Houghton’s use of partnerships as a means of achieving his strategy, we must first understand the strategy: Moving the company away from its past activities toward technology-intensive, yet market focused businesses. Considering this “vision” we can evaluate the appropriateness of alliances for achieving this goal according to your cost-benefit outline above.
It is probably fair to say that alliances are appropriate means for corning to access specialized resources quickly in markets in which the company does not have much prior experience.
- Each senior manager had responsibility for Corning's business success of partnerships. This has created Immediately the problem of lack of adequacy between responsibility and authority. Therefore, senior managers were required to create personal trust and indirect influencing skills to achieve their goals. the CEO created a relocation of the senior management of the Group to the Partnership and back, and thus formed a good understanding of the management team at the partnerships. In addition, he expanded his managerial responsibility in areas such as operations and sales, even if responsibilities were beyond the authority of management. This To create a wider collaboration between managers and improve results.
- Corning's operating system required managers with a high capacity for teamwork and flexible management capability And broad skills, and ability to influence Mtritzionit. Portfolio managers to meet the needs of these small. The Group's management ability to quickly change strategy that will affect the activity is very limited partnerships holding structure and light structure and light partnerships decentralized corporate culture.
Proposal No. 1
There is reason to continue the partnership with Gage. he failed in creating partnerships and yet decided to establish a new partnership. This indicates a strong commitment to the success of the partnership. There is also a good strategic fit between the goals of reason gage and Corning in the medical diagnostics and so it seems that the two companies will work to the success of the partnership.In addition, there is a match and complement Corning's abilities in production and marketing and biological research capabilities of reason gage. This supplement greatly enhances the partnership's chances of success.
The acquisition of companies in the laboratories will not achieve significant market presence with a significant growth capability.
Medical diagnostics is an attractive industry, but is Corning playing a major role there? Is this part of their core business? Consider their relative R&D investment? Corning will probably have to invest immensely to become a dominant player so they may be better off divesting as long as the business is valued by Ciba.
Proposal No. 2
Our opinion on Corning to the IBM as a strategic partner to the PCO which will enable the rapid development of technology and IBM will help to improve its position in the peripherals. However, consider that Corning may find itself out of this partnership in the future following the IBM takeover.
Fiber optic business growing at a high rate (see displayed 12), and therefore should Corning expand its investments in this area. Expanding its fiber optic market, leveraging sales and marketing capabilities of IBM peripherals market, and strong synergy between the peripheral business will enable Corning optical fibers have it all.
Proposal No. 3
In our opinion there is to sell 49 percent of Corning's TV business for $ 100 million and invest the money in the development of LCD screens. This is because LCD screens are expected to be in demand in TVs and computers because they are lighter and occupy less space and consume less energy.
However, the TV market has developed high competition caused reduced prices and making the products are commonly used (commodity).
Glass TV market, Asahi are a major player in the market and Corning are a secondary factor (see displayed 13), and therefore no Corning's market advantage and should concentrate on new technology.
Corning will hold when the LCD technology, strategic partnership with Asahi allow quick entry and broad global market through the marketing channels of Asahi, in accordance with the prescribed strategy and presented the question No. 1.