[8] 2002 e-business-strategies-for-virtual-organizations

e-Business Strategies for Virtual Organizations
Figure 3.5
Value alliance model
46
store, but for REI’s physical stores as well. It has achieved this by
creating virtual alliances, first by establishing firm and fast
relationships with the printing company that continues to
provide the paper brochures used by the physical stores, then by
forming similar alliances by extranet technology between the
online store and its suppliers. This vendor extranet will result in
tighter integration for better supply chain management and
stock planning – moving toward a star alliance model, or
perhaps a value alliance. Business pressures will determine the
outcome and future extent of cooperation.
3.4.4 Value alliance model
Value alliance models bring together a range of products,
services and facilities based on the value or supply chain (value
and supply chains are discussed in greater depth in Chapter 5).
Unlike the star model with its single core, the alliance model
may take any one or a combination of steps in the value chain as
the face or linking node of this chain to other parties. Normally
companies will identify the highly information-dependent
processes and form the value alliance along these lines.
Participants may come together on a project-by-project basis but
generally the general contractor provides coordination. Where
longer-term relationships have developed the value alliance
often adopts the form of value constellations where firms supply
each of the companies in the value chain, and a complex and
enduring communications structure is embedded within the
alliance. Substitutability has traditionally been a function of
efficiency and transaction costs: creating partnerships has been a
costly and slow business procedure, relying as it does on
information transfer, the establishment of trust and business
rules across time zones, culture, currency and legal frameworks.
These have determined the relative positioning of partners on
the chain and the reciprocity of the relationship. This model is