M7_A2 - 1 Strategic Alliances Why the High Failure Rate...

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1 Strategic Alliances: Why the High Failure Rate? Over the years, analysts have tried to explain the high failure rate of strategic alliances. One explanation for problems which may occur when two distinct and separate companies collaborate on a strategic initiative is the absence of a supporting framework which includes a formal “alliance management process, including the stages of partner selection, structuring, Successful Alliance Framework at Abbott Laboratories Abbott Laboratories, a leading pharmaceutical company, has maintained their leadership in the healthcare industry through a robust framework for choosing and cultivating alliance partners. This successful partnership model mirrors the company’s growth and diversification into four key areas: healthcare, diagnostics, pharmaceutical products, and nutrition. A look at Abbott’s timeline reveals a history of successful alliances with other companies in pursuit of innovation, many of which led to mergers and acquisitions. The company is primarily focused on concentric growth through acquisition, and completed 6 new mergers in 2009 alone. “Abbott strengthens its global competitive position with six significant strategic acquisitions: Ibis Biosciences, a provider of leading-edge technology in diagnostic testing and surveillance; Advanced Medical Optics, an established global leader in vision care; Wockhardt Limited, India’s leading local manufacturer of nutritional products; Visiogen, Inc., a leader in next-generation cataract technology; Evalve, Inc., the global leader in the development of devices for minimally invasive repair of cardiac mitral valves; and Solvay Pharmaceuticals, the global pharmaceutical business of the Solvay Group.” (Abbott.com, 2010).
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2 Despite this concentric vertical focus, Abbott has also entered into marketing initiatives with partners, especially with businesses that offered specific geographic or scientific expertise.
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M7_A2 - 1 Strategic Alliances Why the High Failure Rate...

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