A Model for Analyzing the Expected Revenues Resulted From the Development of New Products within Strategic Alliance

Abstract:

The paper describes a model for analyzing expected revenues as a result of the development of new products within strategic alliances. As the business world faces an increased degree of complexity regarding typologies and firms’ motivations, different long-term partnerships can be developed, ensuring a continuous and guaranteed productivity for all partners involved. With the help of the analysis model described in the paper, the equitable profit for the firms within alliances/collaboration, cooperation or partnership agreements can be determined starting with the basic formula of the “return on sales” (ROS). In other words, based on the method for calculating the new value of ROS, the partners will have the opportunity to find out their expected revenues (Vi;n). To this end, they need to be aware of the total costs that one company needs to allocate in order to develop the group of products in collaboration with its partners. Moreover, they need to know the costs allocated by all of the companies together in order to develop a certain product from the group of products. The model is validated by the implementation of the same price strategy and by the achievement of a well-adjusted management, determined by mutual respect between firms within a partnership.