Skip to content

PARTNERSHIPS / STRATEGIC FRAMEWORK

What gives a company leverage over its AI partner?

A partnership changes competitive position through the benefits each party needs and the alternatives each can use. Creating more value together does not necessarily give both parties equal negotiating room.

← Partnerships overview

Who has a workable alternative?

Your negotiating position depends on whether each party can replace a contribution it needs. Assess alternatives for the same objective, including switching costs and lost benefits.[1]

Read all four positions, then select one to examine its implications.

Partner's alternatives ↓
Your firm's alternatives →
Your firm has
workable alternatives
Your firm has
limited alternatives
Partner has
limited substitutes
Partner has
workable substitutes

The positions compare both parties' practical alternatives and the contributions each needs from the other.

EVIDENCE AND DEEPER ANALYSIS

Explore this framework in Commerce

Examine documented arrangements, the strategic interpretation and the limits of the evidence.

Commerce Explore the observatory →
Financial services Coming soon
Care delivery Coming soon

APPLY TO YOUR BUSINESS

Build a partnership strategy around your competitive position.

Bring your proposed arrangement, the capabilities your firm contributes and the alternatives you can pursue.

Discuss a strategic assessment →

Sources and notes

  1. Theory. Richard M. Emerson, "Power-Dependence Relations," American Sociological Review 27, no. 1 (1962), pp. 31-41, especially pp. 32-33. Dependence concerns valued outcomes and costly alternatives for the same outcome. The strategic application here is the Observatory's; the analysis examines how alternatives affect negotiating room.