Last week saw a posting here on the Northwest Education Cluster, a network of school improvement providers located around Portland, Oregon, and announcements about the formation of two other groups - the Constructivist Consortium and the Nova Alliance. At the moment, the Cluster is best described as a loose "community of practice" for management and key staff.  The Consortium and the Alliance are tighter joint marketing activities; the first to promote constructivist learning, the second a shared technlogy environment.

The constellation is portrayed below. The figure portrays the complete membership of the Alliance and Consortium. The Cluster has 38 members, so only a few of the largest are included.

The one firm that belongs to all three ventures is Beaverton, Oregon's Inspiration Software. The company also has separate stategic ties to the United Kingdom's RedHalo, and U.S. publishers Houghton Mifflin and Zaner-Bloser, among others.




The poterntial advantages of alliances are obvious: exposure to partner firms' best practices, new opportunities for marketing, more sales leads, possible cost-sharing, and some counter to the marketing advantages of the "one-stop shop" image that the major publishers present.  A less obvious and more elusive advantage with a potentialy high payoff is the opening of entirely new vistas - new geographic and segment markets, and new product development opportunities.

The potential disadvantages are also clear: lost business if alliance members' offer competitiive or substitute products and/or services; and, even without competition, a lower return on marketing expenses - alliance efforts emphasize the group over the individual, so some individual firms may find themselves less advantaged by the alliance brand than others.  Moreover, the management time spent on the joint activity must be viewed in term of other matters that management has chosen not to address.

One other point related specifically to Inspiration. Two of its relationships are with individual firms that predate the current multi-party alliances. The history suggests that Inspiration's management took small steps, decided it could manage each new relationship, learned, and then took the next step. One of relationships is with Houghton subsidiary Great Source, and that tie may also be a way to develop an option for the company to be acquired. The venture with RedHalo is a step overseas.

A brief review of the firm's history suggests one of its strengths is management flexibility. Insiration was formed in 1982, but by its own reckoning only became an education software firm in 1997. In the interim, it developed a variety of bleading edge programs in a number of different markets. This combination of technical and managerial adaptability is probably essential to a strategy of growth by networking. For what it's worth, your editor's exposure to strategic alliances at Wharton's week-long Executive Education course on strategic alliances some years ago suggested as much. Indeed, that's why this alliance constellation caught his eye. (Thank you, Prof. Habir Singh.)

This posting is just the description of a phenomenon. Expect more analysis later.

Comments are welcome.