Co-branding through successful partner selection: Case Royal Philips Electronics

Abstract

Strategic alliances and co-branding in particular are often compared to real life marriages, where well thought out partner selection can be the secret to a long and successful marriage. Much has been written about strategic alliances, but relatively little has been written about co-branding, especially regarding its partner selection. Studies of co-branding are fragmented and hardly explain the selection process. This study clarifies the opportunities and threats that exist within co-branding and how to consider them when selecting partners. In this study, co-branding is seen as strategic alliance where the goals are strongly on branding level. The two key objectives of co-branding are the economic success of the co-branded product and the positive spill-over effects on constituent brands. This study pieces together a jigsaw of how these goals can be achieved through co-branding and the models of necessary success factors for partner selection contribute to the goal’s approach. Different theories are related to these aspects of the case company Royal Philips Electronics.

This study’s theoretical framework assesses three important objectives necessary to achieve co-branding’s the two main goals. The first objective explains the link between alliance capability and partner selection. Alliance capability is considered the primary determinant for alliance success, and its contribution to partner selection requires examination. The second objective aims to recognize critical success factors for partner selection. The third objective analyzes management of the partner selection at Philips and provides support for previous objectives in this study. The research was conducted through a qualitative study by interviewing Alliance Managers at Philips, who are experts in managing and coordinating alliances.

The findings of this study indicate partner selection is a challenging task, requiring tools and knowledge to facilitate multiple decisions. Therefore, developing alliance capabilities is necessary for mitigating decisions based on intuition. Another factor leading to success is the use of fit dimensions in order to avoid risks and pitfalls of alliances. In addition, brand and product fit are major determinants of successful co-branding. Consumers play a major role in evaluating these determinants necessary for reducing subjectivity in the selection, as well as foreseeing the potential alliance outcomes.