The Americas Group

Giants are beginning to walk the earth. They are coming in the form of organizations uniting on a global scale through top-flight leaders in individual countries.

They aren't conglomerates, multinationals or merger creations. They are a breed of business much sleeker and more flexible, and therein lies their power.

They're "alliances."

Alliances exploded all through in the 1990's. The new enterprises will focus their resources on one, or a few fields. They restructure whole industries and change their economics, turning the basis of competition upside down. They have, collectively, all the capabilities necessary to win in a tough, competitive global marketplace.

An alliance, simply put, is a group of companies forming a network that, in turn operates a single company. The grouping is far more efficient, especially in it's use of capital, than the typical merger or acquisition model.

It is consolidation without huge investment, battles over ownership, postmerger headaches and regrets. The investment dollars can go into building market positions, new products, capacity and capabilities for enterprises rather than for the shares of an acquired company.

Alliances are also far easier in global operations. The headaches over starting a company's presence abroad or working with foreign regulatory boards in an acquisition are not present when striking this other form of relationship agreement.

We are moving from highly parochial, well-guarded, impermeable, turf-conscious castles to collegial, sharing, permeable, flexible, moving areas of influence and responsibility.

Many companies are finding this method appealing. The next decade is being labeled the dawn of the edge of collaboration.

Who is doing this? There are numerous examples, including such efforts as General Motors and Toyota building a plant in Fremont, California. Pepsi and Lipton have aligned Lipton products on Pepsi's distribution system.

Another major source of alliance agreements is with the major emerging market of China. Virtually any new business in China has to work with a partner in that country.

Along that line, of the 20,000 alliances formed globally between 1994 and 1996, about 75% were made across national borders.

We look forward to very high growth in alliance activity in the United States, a relative newcomer, as it catches up to Europe and Asia. European and Asian companies have indicated (in a survey) that their U.S. counterparts were behind in the critical skills of integration and planning and implementation.