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Remix Strategy: The Three Laws of Business Combinations
Alliances, partnerships, acquisitions, mergers, and joint ventures are no longer exceptions in most businesses--they are part of the core strategy. As companies look to external partners for acquiring even strategic resources and capabilities, they need a practical road map for ensuring these relationships generate value. What combinations of resources do we need? How do we manage them over time? What profits will we earn? Will they justify our investments?
Benjamin Gomes-Casseres shares insight from decades of consulting and academic research on how companies create new value by "remixing" resources with other companies. Organized around three laws, Remix Strategy explains how companies can gain the most from their business
* First The value created by the combination should exceed the total that would be generated by the players acting alone. How much more value can we create together in the market, together? What lies behind this "joint value"? * Second The combination must be designed and managed to realize the joint value in reality. What partners and structures fit this goal best? How do we manage those elements that are the sources of the joint value? * Third Each participant must earn sufficient profits to reward its investment. How do we divide the joint value? How might these shares change over time?
Other books explain how to structure deals or how to navigate complexities of organization and culture. This book provides core principles and a practical framework for creating and capturing value, no matter the path chosen.
Benjamin Gomes-Casseres shares insight from decades of consulting and academic research on how companies create new value by "remixing" resources with other companies. Organized around three laws, Remix Strategy explains how companies can gain the most from their business
* First The value created by the combination should exceed the total that would be generated by the players acting alone. How much more value can we create together in the market, together? What lies behind this "joint value"? * Second The combination must be designed and managed to realize the joint value in reality. What partners and structures fit this goal best? How do we manage those elements that are the sources of the joint value? * Third Each participant must earn sufficient profits to reward its investment. How do we divide the joint value? How might these shares change over time?
Other books explain how to structure deals or how to navigate complexities of organization and culture. This book provides core principles and a practical framework for creating and capturing value, no matter the path chosen.
- GenresBusiness
304 pages, Hardcover
First published August 11, 2015
About the author
Benjamin Gomes-Casseres
18 books5 followersBENJAMIN GOMES-CASSERES has been studying, teaching, and consulting on the strategy of business combinations for thirty years. His work has focused on alliances and multipartner constellations, with special attention to innovation strategy. He has studied business combinations in a range of industries, from information technology and pharmaceuticals to automobiles, airlines, and energy.
Gomes-Casseres is a professor at the International Business School, Brandeis University and previously was a professor at Harvard Business School. Before that, he was an economist at the World Bank. He has published his research in three books, including "Remix Strategy: The Three Laws of Business Combinations" (Harvard Business Review Press, 2015). His earlier books are "The Alliance Revolution: The New Shape of Business Rivalry" (Harvard University Press, 1996) and "Mastering Alliance Strategy: A Comprehensive Guide to Design, Organization, and Management" (Jossey-Bass/Wiley, 2003). His research has also appeared in numerous articles, handbook chapters, blogs, and videos.
Gomes-Casseres speaks for and consults widely with companies seeking to create value from external resources and to improve the way they manage business partnerships. He has worked with global companies in pharmaceuticals, biotech, computer hardware and software, industrial products, energy, automotive products, financial services, and R&D services.
Gomes-Casseres earned a DBA in international business from Harvard University, an MPA in economic development from Princeton University, and a BA in history and in economics from Brandeis University. A native of Curaçao, he speaks four languages.
Gomes-Casseres is a professor at the International Business School, Brandeis University and previously was a professor at Harvard Business School. Before that, he was an economist at the World Bank. He has published his research in three books, including "Remix Strategy: The Three Laws of Business Combinations" (Harvard Business Review Press, 2015). His earlier books are "The Alliance Revolution: The New Shape of Business Rivalry" (Harvard University Press, 1996) and "Mastering Alliance Strategy: A Comprehensive Guide to Design, Organization, and Management" (Jossey-Bass/Wiley, 2003). His research has also appeared in numerous articles, handbook chapters, blogs, and videos.
Gomes-Casseres speaks for and consults widely with companies seeking to create value from external resources and to improve the way they manage business partnerships. He has worked with global companies in pharmaceuticals, biotech, computer hardware and software, industrial products, energy, automotive products, financial services, and R&D services.
Gomes-Casseres earned a DBA in international business from Harvard University, an MPA in economic development from Princeton University, and a BA in history and in economics from Brandeis University. A native of Curaçao, he speaks four languages.
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July 7, 2017Loved the topic, packed with (too many) models, often too academic and not always applicable.
September 30, 2015
Modern economies, especially the US and Europe, are built on mergers and acquisitions - firms combining together with other firms to get bigger and by doing so enjoy some benefits of bigness that are not available to the small. The record of these business combinations is obvious to anyone who looks around the economy. In recent years, the notion of alliances and joint ventures - combinations that do not involve large changes in ownership and identity - have also become important, particularly since the US Dept of Justice has said that it would not consider alliances for major antitrust violations. What a great topic, right? Well ... no.
It may surprise some who follow business research that fairly little is systematically known about mergers, acquisitions, or alliances. We know that while many of these transactions are undertaken, few succeed beyond some basic level. These combinations look different across industries and are often made for apparently contradictory reasons. Financial studies of M&A show a spotty performance record as well, with the additional caveat that financial markets "speak" about combinations when they are announced but before anything actually changes, any new investments are made, any redundant employees are laid off. Often, there is little research about what actually happened in a combination and whether the initial financial expectations were borne out. This is possible for large deals, but not for smaller ones. A related line of study has looked at how acquisitions and alliances are managed, once they have been made. The little that we do know suggests that combinations are horribly difficult to manage and that integration problems tend to bias the performance of mergers, acquisitions, and alliances downwards often.
Benjamin Gomes-Casseres from the Harvard Business School has written a trade book on these issues in an attempt to provide guidance to consultants and managers involved with them. It reads likes an HBS trade book and is written in the style of popular business magazines. There are lots of graphs and diagrams, not that many numbers, a simple and active style, and lots of references in case you want to follow up. It is OK as an introduction to the area but does little to integrate across standard research areas or draw overall conclusions. But it does read quickly!
The core of the book is around three law of combinations. These are fairly general and while not tautological do suggest some skill at recasting problems in the form of solutions. For example, the first law is that a combination needs to generate value in excess of what the parties could obtain acting individually - that is without the deal. OK, but if there wasn't some excess value from the combination, then why do it? The second law is that combinations need to be designed and managed to obtain joint value. That also seems obvious - what is the argument for not having to think about how one designs and manages a multi-million dollar deal? The third law is that each participant must receive a return sufficient to justify participation in the deal. Again, what is surprising about this? That is why these are called deals when they are announced.
In fairness, the author uses these "laws" to organize his treatment of issues around M&A and alliances. In that sense the book is organized about strategic issues, implementation issues, and negotiation issues around a deal. That is how the research has gone and it makes the organization of the book reasonable.
I just wish that there would be some breakthroughs in how we understand these transactions. That is not the fault of the author, who has produced an interesting book, even if there is not much new here.
It may surprise some who follow business research that fairly little is systematically known about mergers, acquisitions, or alliances. We know that while many of these transactions are undertaken, few succeed beyond some basic level. These combinations look different across industries and are often made for apparently contradictory reasons. Financial studies of M&A show a spotty performance record as well, with the additional caveat that financial markets "speak" about combinations when they are announced but before anything actually changes, any new investments are made, any redundant employees are laid off. Often, there is little research about what actually happened in a combination and whether the initial financial expectations were borne out. This is possible for large deals, but not for smaller ones. A related line of study has looked at how acquisitions and alliances are managed, once they have been made. The little that we do know suggests that combinations are horribly difficult to manage and that integration problems tend to bias the performance of mergers, acquisitions, and alliances downwards often.
Benjamin Gomes-Casseres from the Harvard Business School has written a trade book on these issues in an attempt to provide guidance to consultants and managers involved with them. It reads likes an HBS trade book and is written in the style of popular business magazines. There are lots of graphs and diagrams, not that many numbers, a simple and active style, and lots of references in case you want to follow up. It is OK as an introduction to the area but does little to integrate across standard research areas or draw overall conclusions. But it does read quickly!
The core of the book is around three law of combinations. These are fairly general and while not tautological do suggest some skill at recasting problems in the form of solutions. For example, the first law is that a combination needs to generate value in excess of what the parties could obtain acting individually - that is without the deal. OK, but if there wasn't some excess value from the combination, then why do it? The second law is that combinations need to be designed and managed to obtain joint value. That also seems obvious - what is the argument for not having to think about how one designs and manages a multi-million dollar deal? The third law is that each participant must receive a return sufficient to justify participation in the deal. Again, what is surprising about this? That is why these are called deals when they are announced.
In fairness, the author uses these "laws" to organize his treatment of issues around M&A and alliances. In that sense the book is organized about strategic issues, implementation issues, and negotiation issues around a deal. That is how the research has gone and it makes the organization of the book reasonable.
I just wish that there would be some breakthroughs in how we understand these transactions. That is not the fault of the author, who has produced an interesting book, even if there is not much new here.
August 18, 2015
Very few companies truly “go it alone” today: partnerships, alliances, cooperative agreements are essential, whilst mergers, acquisitions or takeovers can be commonplace. Your strategy might need a reboot, as the old tried and tested ones may no longer pass muster: a remix strategy could be required.
There are so many pressures on businesses today as well. Disruptive technologies, globalisation, an ever-informed customer and even the “social media” menace can work against you, so having a clear strategy that hopefully works is essential. This book promises to help you see things in a possibly different light. Even if you think you have everything in order, does it hurt to take a look “just in case”. It will either reveal a hole in your plans or confirm (in your eyes) that everything is tickety-boo.
The author mixes real-world consulting experience and academic research to consider how companies are creating value by remixing their resources, working with other companies to hopefully lead to a stronger, unified chain rather than weaker, individual elements. Three laws are central to the author’s thinking: the value created by the combination should exceed the total that would be generated by the players acting alone; the combination must be designed and managed to realize the joint value in reality and each participant must earn sufficient profits to reward its investment.
Potentially this book can deliver a fair bit of good advice. It just did not feel as “open and attractive” as it perhaps could have been. A lot of the advice may appear fairly common-sense and matter-of-fact but, as any successful entrepreneur will tell you, the packaging of several items can be more powerful and valuable than the individual entities taken in isolation.
Whether this book is genuinely revolutionary remains open for debate. It can deliver a lot to an open, appreciative reader who is prepared to dig deep and consider matters. It may either grab your attention or pass you by: there’s not so much middle ground.
Remix Strategy, written by Benjamin Gomes-Casseres and published by Harvard Business Review Press. ISBN 9781422163085. YYY
Autamme.com
There are so many pressures on businesses today as well. Disruptive technologies, globalisation, an ever-informed customer and even the “social media” menace can work against you, so having a clear strategy that hopefully works is essential. This book promises to help you see things in a possibly different light. Even if you think you have everything in order, does it hurt to take a look “just in case”. It will either reveal a hole in your plans or confirm (in your eyes) that everything is tickety-boo.
The author mixes real-world consulting experience and academic research to consider how companies are creating value by remixing their resources, working with other companies to hopefully lead to a stronger, unified chain rather than weaker, individual elements. Three laws are central to the author’s thinking: the value created by the combination should exceed the total that would be generated by the players acting alone; the combination must be designed and managed to realize the joint value in reality and each participant must earn sufficient profits to reward its investment.
Potentially this book can deliver a fair bit of good advice. It just did not feel as “open and attractive” as it perhaps could have been. A lot of the advice may appear fairly common-sense and matter-of-fact but, as any successful entrepreneur will tell you, the packaging of several items can be more powerful and valuable than the individual entities taken in isolation.
Whether this book is genuinely revolutionary remains open for debate. It can deliver a lot to an open, appreciative reader who is prepared to dig deep and consider matters. It may either grab your attention or pass you by: there’s not so much middle ground.
Remix Strategy, written by Benjamin Gomes-Casseres and published by Harvard Business Review Press. ISBN 9781422163085. YYY
Autamme.com
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