ness activity: (1) research and development, (2) manufacturing, (3) marketing and services, and (4) general purpose (see Table 1).

Categorizing alliance types can help us analyze their structure and effects. However, areas of ambiguity remain that defy clarification and precise categorization. In the case of product-or technology-oriented equity

TABLE 1 Typology of Alliances

R&D ALLIANCES

1. Licensing agreement: legal permission to utilize patents or proprietary technology for an up-front fee and/or royalties.

2. Cross-licensing agreement: two or more companies give legal permission to use each other's patents or proprietary technology.

3. Technology exchange: a swap of proprietary technologies, which may or may not involve a transfer of money.

4. Visitation and research participation: the dispatch of researchers to visit, observe, and participate in the R&D activities of partner firms.

5. Personnel exchange: an ongoing and reciprocal program in which researchers from one company spend time working at the partner company.

6. Joint development: two or more companies joining forces to develop new products or technology.

7. Technology acquisition investments: foreign investments in companies aimed at gaining access to technology, especially in small, start-up or innovative, medium-sized firms.

MANUFACTURING ALLIANCES

8. Original equipment manufacturing (OEM): manufacturing a product for another company, which sticks its label on it and handles all aspects of business activities, including marketing and servicing, as if it had manufactured the product itself.

9. Second sourcing: an arrangement whereby a company is given permission to manufacture a product designed and developed by another company as a second source of supply for customers, using the same specifications.

10. Fabrication agreement: use of another company's fabrication facilities to manufacture a product (because the partner lacks its own manufacturing facilities or wishes to subcontract out the task of fabrication).

11. Assembly and testing agreement: components and parts manufactured elsewhere are sent to another company where they are assembled and tested.

MARKETING AND SERVICE ALLIANCES

12. Procurement agreement: a commitment to purchase certain quantities of specific goods or services over a specified period of time.

13. Sales agency agreement: exclusive or nonexclusive rights to sell the partner's original products, or products to which value is added, in specified markets.

14. Servicing contracts: the provision of follow-up service in foreign markets (often tied to marketing arrangements).

GENERAL-PURPOSE TIE-UPS

15. Standards coordination: an agreement on common or compatible technical standards linking devices and systems and users of different machines.

16. Joint venture: two or more firms jointly form a company to develop, manufacture, or market new products.

 

SOURCE: For Table 1 and unless otherwise indicated, prepared by NRC working group.



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