Alliance Network

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What is an Alliance Network? Meaning.

An Alliance Network is a collaboration between two or more firms that band together on a loose, non-contractual basis. Many firms no longer manufacture their products themselves, but have a complex network of companies which supply them with complex products. Collaboration often involves the manufacturing process, but can also involve the R&D process, such as in Pharmacy, or exploration of new geographic markets


Driving forces behind this growing phenomenon are customers' growing demand for customization, service and speed, fierce global competition, outsourcing of non-core activities and, on the other hand, the enabling technologies of the internet and advanced planning systems. It has become difficult for a single company to compete alone against these networks in many industries.


Examples include many automotive assemblers (Ford, GM, Toyota) who order complete dashboards from suppliers, computer assemblers (HP, Dell, Compaq) who integrate complete ordered main boards along with some peripherals, clothing (Nike, Benetton), IKEA.


Also called Supply Network.


Alliance Network Topologies

From computer science, we know of at least 7 different network topologies (figure):

  • Ring
  • Line
  • Mesh
  • Tree
  • Star (Hub and Spoke)
  • Bus
  • Fully Connected

Each of these topologies is also conceivable in a business environment.

Certain type of networks may be more suitable for certain firms depending on a number of factors  including:

  • Strategy (Compete - Collaborate)
  • Position (Dominant - Dependent)
  • Size (SME - Multinational)
  • Environment (Static - Dynamic / Innovative)
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Supply network does not necessarily mean or require all the suppliers in a network collaborate, some may collaborate for (...)
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Compare with: Vendor Managed Inventory  |  Coalition  |  Co-Creation  |  Lean Manufacturing  |  Value Chain  |  Virtual Business  |  Strategic Alliance  |  Acquisition Integration Approaches  |  Joint Venture  |  Outsourcing  |  Vertical Integration  |  Disaggregation

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