Case Analysis: Aegis Analytical Corporation’s Strategic Alliances

1311 words 6 pages

Aegis Analytical was a start-up, manufacturing process software provider, developing solutions for the pharmaceutical industry. The company was founded on managerial know-how, established by two co-founders with in-depth knowledge of the manufacturing domain and software know-how, developed their flagship product called Discoverant. Discoverant was a revolutionary product that offered a solution to highly complex problems in the manufacturing process of pharmaceutical companies. The software had the following features: it collected data during the production process, tracked failures and then analyzed the data to give sophisticated bases for solutions to managers. Aegis aspired to be the recognized leader in the process
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The alliances were in the form of contractual agreements.
Strategically, this provided Aegis the flexibility to exit the alliance easily.

Key issues:
Both strategic partners: Honeywell and Rockwell were big companies. There were several major issues associated with their big size:
1) Discoverant became just one item from Honeywell’s and Rockwell’s sales catalogue. Hence, the sales efforts of both allies were in no way focused on selling Aegis’ product, but were rather offering it as an “add-on”. Aegis was not on the high priority list for the sales managers, and this fact was especially reinforced with the crash of the dot-coms and the post - 9/11 economic downturn, when corporations were “sticking to the basics” to survive.
2) Moral Hazard: Aegis committed a huge part of their organizational resources to both alliances. In contrast, Aegis’ alliance partner, Honeywell laid off 25 percent of its sales force including individuals with whom Aegis had worked. The Aegis and ProPack Data agreement was hindered when Aegis’s primary contact left ProPack Data handing off responsibility to someone who did not take an active role, thereby frustrating the Aegis team.
3) Due to the big size of both Strategic Allies, the sales process was burdened with additional unnecessary procedures and bureaucracy. This likely affected the timeline for future sales – a fact prospective consumers have most probably considered when making a decision “pro” or “against” purchasing