STRATEGIC BUSINESS ALLIANCE

(PARIKSHA LABS PVT LTD.)

Submitted in partial fulfillment of the requirement
for the award of the degree of

MASTER of BUSINESS ADMINISTRATION

IN
SOFTWARE ENTERPRISE MANAGEMENT
(COURSE CODE: 099)
Under the guidance of
Mr. ALOK KUMAR (SENIOR EXECUTIVE & BUSINESS DEVELOPMENT)
Mr. RAVI SHANKAR RAI (PROJECT INTERNAL GUIDE)
Submitted By

SHREYA CHAWLA
(00811809913)

CENTRE FOR DEVELOPMENT OF ADVANCED COMPUTING

AFFILIATED TO

GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY (GGSIPU)

Dwarka, Delhi - 110078

ABSTRACT
STRATEGIC BUSINESS ALLIANCE (OFFSHORE PARTNERSHIP) aims to seek
business alliance with countries of central Europe thereby providing them with mobility
solutions i.e. MOBILE APPLICATIONS. This includes:

Identify the Small & Medium IT Companies in central Europe.

Analyze their Business Model.
Analyzing the Onshore Data.

The following are the problems faced while carrying out business processes at onshore:

High labor cost

High operating costs
Limited technical resources
Emphasizes only on local markets thereby addressing unique segment needs

This business alliance offers scale, skills & cost advantages to its offshore partners & has the
following benefits:

Reduce & control operating costs

Improves company focus on its core competencies & strategic imperatives
Re-allocate internal resources to higher value purposes
Address the issue of limited internal resources
Accelerate re-engineering & transformation efforts
Manage more effectively a difficult or problematic function

Therefore, a need arises for the formulation of strategies to incorporate business alliance with the
countries of central Europe (Belgium, Denmark, Switzerland, Finland, Sweden, Germany,
Australia, South Africa) so as to provide benefits to its offshore partners.

ACKNOWLEDGEMENT
I am grateful to the authorities of PARIKSHA LABS PVT LTD. for having permitted me to go
ahead with the training on STRATEGIC BUSINESS ALLIANCE in partial fulfillment of the
requirements for the award of the degree of MASTER OF BUSINESS ADMINISTRATION
IN SOFTWARE ENTERPRISE MANAGEMENT.
My sincere thanks & gratitude is also due to Mr. Alok Kumar, Project Supervisor for his
valuable guidance during the course of training.
I am very thankful to Mrs. Mary Jacintha, Head of department of MBA (SEM) for approving
my training, timely encouragement & supervision.
I am thankful & grateful to Mr. Ravi Shankar Rai, Project Guide for his valuable guidance &
principles, fundamentals, concepts and execution regarding the training which have helped me in
completion of training & preparation of the report.
Last but not the least, I would like to thank my parents for their help & cooperation in training
work, typing/editing of the training report.

SHREYA CHAWLA
MBA (SEM)
BATCH: 2013-2015
00811809913

TABLE OF CONTENTS
Chapters

Page No.

LIST OF TABLES

LIST OF FIGURES

ii

EXECUTIVE SUMMARY

iii

INTRODUCTION
About Pariksha Labs
About the Project

1
2

THEORITICAL FRAMEWORK
STRATEGIC ALLAINCE: OVERVIEW
STRATEGIC ALLIANCE: TYPES
STRATEGIC ALLIANCE: PURPOSE

3
5
8

DETAILED BUSINESS PROCESSES

(i)
UNDERSTANDING SERVCE OFFERINGS OF PARIKSHA LABS
(ii)
MARKET ANALYSIS (PRICING POLICIES)
(iii)
STRATEGY FORMULATION
(iv)
IDENTIFYING PROSPECTS IN CENTRAL EUROPE
(v)
PREPARING THE NEWSLETTER
(vi)
PITCHING TARGET CUSTOMERS (MAILER)
(vii) CRM ACTION/UPDATE
(viii) MAILER RESPONSE ANALYSIS & FOLLOW-UP

10
11
16
17
18
19
20
28

DATA COLLECTION

29

ANALYSIS & INTERPRETATION

30

SCREENSHOTS OF GENERATED REPORT

32

CONCLUSION

40

LIMITATION & RECOMMENDATIONS

41

BIBLIOGRAPHY

42

APPENDICES

LIST OF TABLES

S.No.
1.

2.
3.
4.
5.
6.
7.
8.
9.

Tables
Definitions of Strategic Alliances
Factors Leading To Alliances
Functions of strategic alliance
Pros and cons of using the dedicated team
& Time and Material (T&M) pricing
model
Pros and cons of using the FP model
Pros and cons of using the hybrid model
Pros and cons of using a managed service
model
Pros and cons of using outcome-based
pricing model
Pros and cons of using a transaction-based
pricing model

Page No.
3
4
9
11

12
13
13
14
15

LIST OF FIGURES

S.No.
1.
2.
3.
4.
5.
6.

Figures
International Strategic Technology Alliance
Announced Mergers & Acquisitions : IT
Consulting & Services
Announced Mergers & Acquisitions: Software
Share of International Alliances & International
M&As
Announced Mergers & Acquisitions : India
Purposes of Strategic Alliances

Page No.
iii
iii
iv
6
7
8

EXECUTIVE SUMMARY
The 1990s have seen significant growth in international strategic alliances, paralleling the
increase in cross-border mergers and acquisitions (M&As) as shown in the figure below:
FIGURE 1

Alliances are being formed across a broad range of sectors, including chemicals and
pharmaceuticals, computers and electronic equipment, and financial and business services. But,
in the sectors of IT consultancy & services as well as software, the value of mergers &
acquisitions (M &A) has increased in the year 2013 as compared to the year 2012. This is
evident from the figures given below:
FIGURE 2

Source: Thomson Financial Securities Data

FIGURE 3

Source: Thomson Financial Securities Data

Thus, the strategic alliances play an important role in achieving globalization. The formation
of strategic alliances has been seen as a response to globalization and
increasing uncertainty and complexity in the business environment. Strategic
alliances involve the sharing of knowledge and expertise between partners
as well as the reduction of risk and costs in areas such as relationships with
suppliers and the development of new products and technologies.
In this project, strategies have been formulated to form a strategic business
alliance with the countries of Central Europe (Germany, Switzerland,
Belgium, Denmark, Australia, Finland, Sweden & South Africa). In order to
identify the target prospects in these countries following parameters were
taken into consideration:

Small & Medium IT companies in these countries.

Companies must have been established for 5years or more.
Companies having 2 or more focus areas of their own.
Companies must be in need of mobile applications (mobility solutions).

After this, contact details for the decision makers of the targeted companies were collected and
the mailer containing the newsletter for offshore partnership was sent to these prospects through
a tool, amazonses.com. Analysis of the generated report was done so as to take a follow-up
action. At the end of this project, Pariksha labs was able to get positive responses.

INTRODUCTION
ABOUT PARIKSHA LABS
PARIKSHA LABS PRIVATE LIMITED provides outstanding mobility services that cover all
aspects of enterprise and consumer-facing mobility. Pariksha Labs begins with a rigorous
analysis of the processes and business needs and provide comprehensive services including
mobility strategy, application development, testing, and security. In addition, it can provide
mobile analytics and integration with ad networks. The following is an overview of the specific
services available in each of these areas:

Mobility is focused on helping its clients achieve breakthrough growth throughout the
rapidly changing mobile ecosystem.
It combines deep industry expertise with cross-industry mobility experience to bring their
clients leading-edge solutions.
It provides services and support for designing, building and benefiting from mobility
starting with the right foundation and backed by a holistic, shared strategy and the best
supporting technologies.
It offers mobility and embedded software services across a wide range of industries and
platforms, including Android, Apple iOS, Windows Phone and Windows 8.
It can design, build, test and implement the right solution for the company and support
that solution on a managed service basis.
It offers a broad suite of packaged solutions and assets to address the most important
mobility challenges.

ABOUT THE PROJECT

Today more people have access to a mobile phone than to clean water. The world is rapidly
approaching billions of Internet-connected users and consumer electronic, commercial and
industrial connected devices. Mobility is a global phenomenon that is transforming the world in
many ways. Smart phones and tablets are the new battleground for attracting consumers to
brands and engaging with them, turning customer service into 24x7 anytime, anywhere,
contextual interactions. Mobility liberates IT services from the desktop, transforming business
into a fast, efficient, and flexible process.
Pariksha Labs helps their customers gain significant competitive advantage by increasing their
workforce productivity, growing their revenues, and leveraging mobility to create new business
models.
Therefore, a need arises to seek business alliance with countries of central Europe thereby
providing them with mobility solutions i.e. MOBILE APPLICATIONS. The objective of
STRATEGIC BUSINESS ALLIANCE basically includes the following:

To get more & regular business to cope up with the unpredictability of the market.
To make up for more revenues from foreign currency.
To expand the business territory.

It aims towards the formulation of strategies to incorporate business alliance with the countries
of central Europe (Belgium, Denmark, Switzerland, Finland, Sweden, Germany, Australia, and
South Africa) so as to provide benefits to its offshore partners.
ACTIVITIES
1.
2.
3.
4.
5.
6.
7.
8.

UNDERSTANDING SERVCE OFFERINGS OF PARIKSHA LABS

MARKET ANALYSIS (PRICING POLICIES)
STRATEGY FORMULATION
IDENTIFYING PROSPECTS IN CENTRAL EUROPE
PREPARING THE NEWSLETTER
PITCHING TARGET CUSTOMERS (MAILER)
CRM ACTION/UPDATE
MAILER RESPONSE ANALYSIS & FOLLOW-UP

The scope of formulation of strategic business alliances includes targeting the following:

Countries of central Europe (Belgium, Denmark, Switzerland, Finland, Sweden,

Germany, Australia, South Africa).
Small & Medium IT companies in these countries.
Companies must have been established for 5years or more.
Companies having 2 or more focus areas of their own.
Companies must be in need of mobile applications (mobility solutions).

THEORITICAL FRAMEWORK
STRATEGIC ALLIANCE: OVERVIEW
Globalization is a trend of the world nowadays; it can also be a very expensive process, as it
requires the firm to own a well-developed R&D capabilities, financial support, production,
distribution network, sales & marketing skills so as to make an outstanding over its rivals
internationally. However, a firm may discover that it lacks at least some of the necessary internal
resources to effectively extend its global reach. Therefore, in most occasions, a firm may seek for
partners to share the cost as well as the risk in this process. Strategic alliance has become a
favorable choice for many multinational as well as growing companies as a strategy responding
to rapid economic development and increasingly fierce competition in the global market.
Strategic alliances are agreements between companies (partners) to reach objectives of common
interest. Strategic alliances are among the various options which companies can use to achieve
their goals; they are based on cooperation between companies. Strategic alliance can be
described as a process wherein participants willingly modify their basic business practices with a
purpose to reduce duplication and waste while facilitating improved performance. A strategic
alliance has to contribute to the successful implementation of the strategic plan; therefore, the
alliance must be strategic in nature. In simple words, a strategic alliance is sometimes just
referred to as partnership that offers businesses a chance to join forces for a mutually
beneficial opportunity and sustained competitive advantage. A literature review of the definitions
of strategic alliances is given below:
TABLE 1: Definitions of Strategic Alliances
Porter, 1990

Dussauge & Garrette,

1995

Douma, 1997

Gulati, 1998

Strategic alliances are long-term agreements between firms that go

beyond normal market transactions but fall short of merger. Forms
include joint ventures, licenses, long-term supply agreements, and
other kinds of inter-firm relationships.
An alliance is a cooperative agreement or association between two or
more independent enterprises, which will manage one specific project,
with a determined duration, for which they will be together in order to
improve their competences. It is constituted to allow its partners to
pool resources and coordinate efforts in order to achieve results that
neither could obtain by acting alone.
A strategic alliance is a contractual, temporary relationship between
companies remaining independent, aimed at reducing the uncertainty
around the realization of the partners strategic objectives (for which
the partners are mutually dependent) by means of coordinating or
jointly executing one or several of the companies activities.
Strategic alliances are voluntary arrangements between firms
involving exchange, sharing, or co-development of products,

Phan, 2000

technologies, or services.
Alliances are long-term, trust-based relationships that entail highly
relationship-specific investments in ventures that cannot be fully
specified in advance of their execution.

Strategic alliances have some characteristics:

Two or more organizations (business units or companies) make an agreement to achieve
objectives of a common interest considered important, while remaining independent with
respect to the alliance.
The partners share both the advantages and control of the management of the alliance for
its entire Duration.
The partners contribute, using their own resources and capabilities, to the development of
one or more areas of the alliance (important for them). This could be technology,
marketing, production, R&D or other areas.
Strategic alliances yield better results under certain conditions:
When each partner recognizes the need to have access to capabilities and competencies it
cannot develop internally.
When a gradual approach is preferable in accessing resources, capabilities and
competencies. Uncertainties about the future evolution of demand and technology often
advise flexibility. The alliance can provide this.
When it is not possible to acquire another company in order to achieve particular
development goals. It is a fairly common belief that the management of an alliance must
have qualities different at least in part from those of the parent company (the partners).
The reason is simple. The management of a strategic alliance is profoundly different from
that of a company that acts independently.
There can be many factors leading to the formation of alliances:
TABLE 2: Factors Leading To Alliances
1970s
1980s
Product performance
Position in the sector
Produce using the most recent Construct position in the
technologies.
sector.
Marketing beyond national
borders.
Sales based on product
performance.

Consolidate position in
the sector.
Economies of scale and
Scope.

1990s
Capabilities and competencies
Access to new opportunities
through a constant flow of
innovation.
Anticipate rivals to maximize
the creation of value.
Reduce total cost for the
product or client segment.
Acquire advantages in responding
to changing conditions and
emerging opportunities.

STRATEGIC ALLIANCE: TYPES

There are a lot of types of strategic alliances, which are listed below:
Joint Ventures: A joint venture is an agreement by two or more parties to form a single
entity to undertake a certain project. Each of the businesses has an equity stake in the
individual business and share revenues, expenses and profits. Joint ventures between
small firms are very rare, primarily because of the required commitment and costs
involved.
Outsourcing: The 1980s was the decade where outsourcing really rose to prominence,
and this trend continued throughout the 1990s to today, although to a slightly lesser
extent.
Affiliate Marketing: Affiliate Marketing has exploded over recent years, with the most
successful online retailers using it to great effect. The nature of the internet means that
referrals can be accurately tracked right through the order process. Amazon was the
pioneer of affiliate marketing, and now has tens of thousands of websites promoting its
products on a performance-based basis.
Technology Licensing: This is a contractual arrangement whereby trade marks,
intellectual property and trade secrets are licensed to an external firm. It is used mainly as
a low cost way to enter foreign markets. The main downside of licensing is the loss of
control over the technology as soon as it enters other hands the possibility of
exploitation arises.
Product Licensing: This is similar to technology licensing except that the license
provided is only to manufacture and sell a certain product. Usually each licensee will be
given an exclusive geographic area to which they can sell to. It is a lower-risk way of
expanding the reach of your product compared to building your manufacturing base and
distribution reach.
Franchising: Franchising is an excellent way of quickly rolling out a successful concept
nationwide. Franchisees pay a set-up fee and agree to ongoing payments so the process is
financially risk-free for the company. However, downsides do exist, particularly with the
loss of control over how franchisees run their franchise.
R&D: Strategic alliances based around R&D tend to fall into the joint venture category,
where two or more businesses decide to embark on a research venture through forming a
new entity.
Distributors: If you have a product one of the best ways to market it is to recruit
distributors, where each one has its own geographical area or type of product. This
ensures that each distributors success can be easily measured against other distributors.
Distribution Relationships: This is perhaps the most common form of alliance. Strategic
alliances are usually formed because the businesses involved want more customers. The
result is that cross-promotion agreements are established.

Link to M&As
Recent trends in international strategic alliances are quite similar to those in cross-border
mergers and acquisitions as shown in the figure below. Both seem to reflect the global
restructuring strategies of firms, which face increasing globalization and technological change.
On the one hand, firms are actively involved in mergers and acquisitions, in particular in the
same or related industries as companies sell non-core businesses and acquire assets to strengthen
their core businesses at the global level. On the other hand, there is also a general movement by
firms towards the dis-internalisation of activities both along and between value-added chains
and towards specialization in those activities where they have or can acquire a perceived
competitive advantage. But because of the interdependence of technological advances, firms may
find that they need to assure access to the products or assets over which they have now
relinquished control. They may also want to exercise influence over the quality and price of these
products and related innovation. As a result, this dis-internalisation can be replaced by inter-firm
co-operative arrangements or strategic alliances.
FIGURE 4: Share of International Alliances & International M&As
7000
6000
5000
4000
International Alliances
3000

International M&A's

2000
1000
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: Thomson Financial Securities Data

As far as, Merger & Acquisition in India is concerned, then there was a sudden increase in the
M&As during the year 2000. Furthermore, the numbers of transactions during the year 2007
were the highest under M&As i.e. the number of transactions were around 1,600. However, the
number of transactions dropped to only 800 in the year 2013 but they were still much higher than
in the 1990s.

FIGURE 5

Source: Thomson Financial Securities Data

However, strategic alliances have advantages as well as disadvantages in comparison to mergers
and acquisitions. In short, strategic alliances may entail more problems (risks) in control and
implementation while M&As can provide a merged firm with a more integrated decision-making
structure. Strategic alliances can be difficult to realize and involve certain risks since alliance
implementation is generally beyond the control of a single party. Partnerships make decisionmaking and control processes more cumbersome. Shared ownership arrangements can also create
problems that result from the roles that partners assume in the venture, since parties may not be
clear about their specific roles. A partner may establish co-operative linkages with competing
firms, which may hamper the present alliance. As firms enter into more and more alliances, it
may be more difficult for firms to keep balance among alliances. Some partners may gain more
than the others, and unequal benefits can damage a partnership when expectations differ and
stakes are high. Large partners tend to dominate smaller partners and can shape relationships by
changing strategies unexpectedly. As a result, a strategic alliance may entail higher transaction
costs with lower joint investment than a full merger.

STRATEGIC ALLIANCE: PURPOSE

Strategic alliances are formed for various purposes such as market entry and expansion, joint
product development (R&D), a production partnership or a combination of these.
Figure 6: Purposes of Strategic Alliances
10
9
8
7
6

Other Alliances

R & D Alliances

Marketing Alliances

Manufacturing
Alliances

2
1
0

Source: Thomson Financial Securities Data.

The largest number of co-operative alliances during 2003-13 were formed to engage in joint
sales and marketing activities (29%). R&D strategies were noted as the primary reason for
forming an alliance in 17% of cases, while joint manufacturing and production activities were
observed in 25% of total alliances. However, there has been a change since the second half of the
2000. First, the number of joint manufacturing and production activities is higher than that of
joint sales and marketing activities, while R&D alliances are still relatively few. Second, the
importance of the three traditional major purposes of strategic alliances manufacturing,
marketing and R&D has decreased significantly; now accounting for less than half of recent
alliance activities. This trend partly reflects the rapid increase of strategic alliances in service
sectors such as business services rather than in manufacturing.
Strategic alliances developed and propagated as formalized interorganizational relationships, particularly among companies in international

business systems. These cooperative arrangements seek to achieve

organizational objectives better through collaboration than through
competition. Strategic alliances are critical to organizations for a number of
key reasons:
Organic growth alone is insufficient for meeting most organizations
required rate of growth.
Speed to market is essential, and partnerships greatly improve it.
Complexity is increasing, and no single organization has the required
total expertise to best serve the customer.
Partnerships can defray rising research and development costs.
Alliances facilitate access to global markets.
Strategic alliances are becoming an important form of business activity in
many industries, particularly in view of the realization that companies are
competing on a global field. However, through strategic alliances, companies
can improve their competitive positioning, gain entry to new markets,
supplement critical skills, and share the risk and cost of major development
projects. Strategic alliances now account for more than 20 percent of the
average companys revenues. This growth is not surprising because most
strategic alliances are profitable. Strategic alliances whether they are in the
form of joint ventures, franchise arrangements, dealerships, distributorships,
licensing arrangements, or strategic investments are nothing new; they
have existed for centuries. In recent years, though, strategic alliances have
proliferated and their importance has mushroomed because of dramatic
economic and technological changes in the global economy.
There can be various objectives of forming a strategic alliance. A few
functions of strategic alliance as well as their reported proportions in forming
an alliance are seen in the table below:
TABLE 3: Functions of strategic alliance
Function of Alliance
Joint Marketing
Joint R&D
Joint Manufacturing
Joint R&D & Manufacturing
Joint R&D & Marketing
Joint Manufacturing & Marketing
Joint R&D, Manufacturing & Marketing
Market Development
Service Provision

Proportion of Alliance Reported (%)

28.5
9.4
7.7
6.4
2.4
2.2
0
24.7
18.7

International alliances occur in many different industries and between firms of different sizes.
For example, in the automobile sector, General Motors partners include Isuzu, Suzuki, Fuji,

Toyota and Fiat; Ford is allied with Mazda. The picture is similar in other sectors, including
Semi-conductors, computers, information technology, telecommunications, air transport and
biotechnology.
However, for the purpose of strategic business alliance regarding mobile applications in
Pariksha Labs Pvt Ltd, we will restrict ourselves to sectors like small & medium sized
software, IT & consulting companies of central Europe. These countries are targeted because
they are developing in the field of technology as well as their entrepreneurship environment is
growing.

DETAILED BUSINESS PROCESSES

The activities undertaken in this project are as follows:
(i)

UNDERSTANDING SERVICE OFFERINGS OF PARIKSHA LABS

Pariksha is totally focused on providing its customers the best of class services. Over the last 7
years, Pariksha has worked with several global customers and partners in US, Canada, MiddleEast, Switzerland, Italy, Germany and Japan; and delivered innovative services around:

Mobile Apps

Web

QA/Testing

Parikshas mission is to help startups and SMEs build great new products. It has deep
competencies and sharp focus on Mobile/iPad apps, Rich Internet Applications, Adobe platforms,
inDesign Plug-in, Online video & QA Testing Services. They are focusing on the following:

Applications
Data aware enterprise mobility applications
Multimedia applications
Games
Platforms & Technologies

iPhone/iPad SDK
Android/Blackberry
HTML5
SQL, XML & CSS

Back-ends Java/J2EE based

Testing/QA Consulting Services

(ii)

Off-campus off-shore development team for Product Testing.

Software architecture and design review services.

MARKET ANALYSIS (PRICING POLICIES)

A pricing model for an IT service refers to the contractual agreement between a service provider
and a service gainer. The agreement is formed based on the type of service the parties engage in.
Today, pricing models in the IT industry have matured from the traditional T&M and FP models
to the modest managed services / outcome based models.
The best fit pricing model
For a pricing model to be successful, it should strike the right balance between the customers
expectations of quality, timeliness and price, and the service providers cost and operational
efficiency. Customer engagements may not be successful with one type of pricing model every
time. Its a journey for both the parties to go agile based on best fit for the scoped services and
engagement models.
Mutually beneficial pricing models
Many pricing models are currently practiced by the IT industry. From the traditional T&M and
FP, to more talented ones like managed service / outcome-based models. At a higher level,
pricing models can be divided into linear and non-linear categories.
Linear pricing models
Linear pricing models are based purely on the relationship between time and material (effort and
rate). The service provider is paid based on the resource provided or the effort spent for the
required duration of agreed time. Some linear pricing models are described below:
a) Dedicated team: The dedicated team model works as a dedicated service provider for a
period of time. This team acts as the virtual extension of the clients in-house
development team. The customer takes the onus of getting work done effectively from
the team. Advantages of this model include knowledge retention and the flexibility of
utilizing the team for different requirements. Monthly bills are raised based on the
number of resources dedicated every month. The pros and cons of using the dedicated
team pricing model are shown in the table below:

TABLE 4: Pros and cons of using the dedicated team & Time and Material (T&M) pricing
model
Pros
Cons
Simple to understand and implement.
Lack of ownership from service providers.
Can be effectively used to compare prices Low level of team motivation due to lack of
across service providers.
career Mentoring.
Knowledge retention.
No time / effort commitment from the
customer in the utilization of resources from
service providers.
Flexibility to utilize the team for different Not closely related to customers business need
requirements as needed.
or outcome.
Low risk model for both service provider and
No incentive for service providers to be
customer.
efficient.
Source: Pricing Models (Whitepaper) By MindTree
b) Time and Material (T&M): The T&M model works best for customers who want a
flexible and agile project execution. Here they play a greater role in the development of
the software product or solution. This model works best when requirements change
frequently and is generally used for product development projects. In this model the
customer carries virtually all the related risks of scope, quality of deliverables and project
management. Therefore the margins for T&M players are the lowest. There are no risks
and no investments by service providers. The service provider assigns a team to the
customer and the actual time spent by the team on the project is billed. Monthly invoicing
is pro-rata, based on the total hours spent on the project and the rates for the skill sets
involved. The pros and cons of using the FP model is shown in the table above.
c) Fixed Price (FP): The fixed price model is ideal for small and medium level projects
with clear and well-defined requirements. In this model, the service provider and the
customer both carry some scope-related risk. But, as per the agreed contract, any change
in the scope would result in a change in the price. Fixed price models allow customers to
pay a fixed price for a project that is agreed upon by both the parties. The fixed price
could be split and paid on milestones. This model works where the scope and
specifications of the project are crystal clear from the very beginning and system
requirements have been defined clearly. In this model, it is very important to discuss
everything and make an estimation of the appropriate cost of the project at the very
beginning. The pros and cons of using the FP model is shown in the table below:
TABLE 5: Pros and cons of using the FP model
Cons
sized Customers have no control in resource
utilization as maximum ownership is with
service provider
Closely related to customers business needs Knowledge retention is at risk as the
Clearly scoped
engagements

Pros
small /

medium

with clearly defined objectives and milestones

development team might get dispersed after

project completion
Low risk model for customers
High risk model for service provider
High assurance of project completion within Difficult to compare prices across service
estimated budget and timelines
providers as final cost driven by productivity
and risk assessment
Highly motivating for service providers to be Quality can suffer as end-to-end development
efficient and productive
is managed by the service provider
Source: Pricing Models (Whitepaper) By MindTree
Non-linear pricing models
Non-linear pricing models decouple the relationship between time and material (effort and rate).
Normally T&M and FP do not offer much scope for modification and changes. Service providers
have realized the need to be flexible to satisfy their customers. This has led to innovations in
pricing models that suit varying needs. Some non-linear pricing models are mentioned below:
a) Hybrid model: The hybrid model uses T&M techniques to estimate costs for projects
that do not have clear-cut goals or detailed and complete requirements initially. It then
allows customers to pay a fixed price based on the estimation. This hybrid pricing model
has the best features of both the models T&M and FP, as mentioned above. It allows
service providers to deploy resources as in the T&M model, but most of the project is
executed according to the FP model. Hence, the project has a smooth workflow and wellaligned processes. The pros and cons of hybrid model are shown in the table below:
TABLE 6: Pros and cons of using the hybrid model
Pros
Cons
Utilizes the best features of both the T&M and Customer has no control in resource utilization
FP pricing models
and maximum ownership is with service
providers
Middle ground for the customers amongst Shared risks between service provider and
hourly payment and one-time payment
customer
Helps the customer to optimize the budget
without compromising on the quality of
deliverables
Low risk model for both service provider and
customer
Knowledge retention
Source: Pricing Models (Whitepaper) By MindTree
b) Managed services model: The managed services model offers defined service
deliverables at a fixed cost. Traditionally, value was realized according to how well it was
managed by the service provider, and how well it was perceived by the customer. This
was more qualitative in nature. In the managed services model on the other hand, the
value-add is quantitatively measured in terms of target Service Level Agreements

(SLAs). This is based on clearly defined parameters in project performance and quality.
The pros and cons of managed services model are shown in the table below:
TABLE 7: Pros and cons of using a managed service model
Pros
Since delivery and stakeholder expectations are
the service providers responsibility, the
customer can focus fully on their core strategic
initiatives
Service providers are more independent and
have a relatively interference-free management
of the project
Enables service providers to make long-term
strategic investments that should indirectly
benefit the customer
Service providers bring their best practices into
the project, thereby making key process
improvements

SLA driven approach results in key process

improvement
delivering
significant,
measurable benefits to the customer

Cons
Service providers are sometimes reluctant to
assume more management responsibilities

Culture mismatch between the customer and

service provider can result in a lack of
understanding, which may affect deliverables
Sometimes, service providers dont have a
view of the scope of the project or may not
understand all of the customers pain points,
which could result in major setbacks
In a multi-service provider scenario, where for
instance one provider manages applications
and the other, infrastructure, blame games are
common, with no-one willing to assume
responsibility
Re-allocation of the contract, in case of
performance issues or non-conformance of
SLAs, might be a challenge, given that the
existing service provider will be less
cooperative

Knowledge
retention
becomes
more
streamlined and sustainable
Source: Pricing Models (Whitepaper) By MindTree
c) Outcome-based pricing model: Outcome-driven solutions are pin-pointed and
positioned as delivering specific value to the business. Outcome-based projects aim to
deliver measurable impact on the customers overall business results. The basic
philosophy is to align the interests of the service provider and the customer so that both
work towards the same goal. In this model, the scope is the business outcome itself.
Clearly defined and fixed outcomes which can be measured and delivered for a given
project is critical to its success. The pros and cons of using outcome-based pricing model
are shown in the table below:
TABLE 8: Pros and cons of using outcome-based pricing model
Pros
Cons
Directly aligned to the customers business Lack of transparency in how work is

outcome
Potential for higher eventual savings as labor
arbitrage is replaced by productivity and
synergies between tasks
Ability to incent more innovative behavior
from service provider
Deep appreciation of the customers business
model, operations and industry nuances

performed
Little insight into cost of services

Cultural resistance from both customer and

service provider
Customer enterprises are sometimes too
immature
to
appreciate
the
change
management process
Source: Pricing Models (Whitepaper) By MindTree
d) Transaction pricing model: A transaction is a sequence of steps with defined input and
output, which achieves a business purpose. Examples of transactions include invoice or
payroll processing. A transaction unit is a unit of measure with which a transaction can be
measured. Examples of transaction units are per pay slip or per invoice, etc. A
transaction price is typically quoted as price per transaction unit. It is generally
mentioned as applicable for a specified transaction volume range. The pros and cons of
using transaction pricing model are shown in the table below:
TABLE 9: Pros and cons of using a transaction-based pricing model
Pros
Closely tied to the customers business cycle

Cons
May not be directly tied to the customers
business outcome
Enhances customer visibility into consumption Lack of transparency on how work is
pattern
performed
Encourages productivity and efficiency
Source: Pricing Models (Whitepaper) By MindTree

BUILD OPERATE TRANSFER (BOT)

The BUILD OPERATE TRANSFER (BOT) or BUILD OWN OPERATE TRANSFER
(BOOT) is a form of project financing wherein a private entity receives a concession from the
private or public sector to finance, design, construct & operate a facility stated in the concession
contract. This enables the project proponent to recover its investments, operating & maintenance
expenses in the project. Due to long term nature of the arrangement, the fees are usually raised
during the concession period. Examples of countries using BOT are: Thailand, Turkey, Taiwan,
Saudi Arabia, Israel, India, Japan, China, Malaysia, Philippines, Egypt, Mayanmar & a few US
states (California, Florida, Indiana, Texas & Virginia).
Pariksha Labs also follows the BOT model.

(iii)

STRATEGY FORMULATION

The scope of formulation of strategic business alliances includes targeting the following: Countries of central Europe (Belgium, Denmark, Switzerland, Finland, Sweden,
Germany, Australia, South Africa).
Small & Medium IT companies in these countries.
Companies must have been established for 5years or more.
Companies having 2 or more focus areas of their own.
Companies must be in need of mobile applications (mobility solutions).
These countries of central Europe are targeted because they are developing in the field of
technology as well as their entrepreneurship environment is growing. These companies of central
Europe basically outsource their technical work, which is known as Strategic Outsourcing.
Strategic Outsourcing (SO) is the utilization of world class skills, technology & resources to
consult develop & deploy Technical Services under a multilayer contractual relationship. SO
thereby affords customers in the following manner:

Increased competitive advantage in their industry.

Improved cost-to-benefit value relationship in their business.
Focus on core competencies.
Always includes Technical management services.

There has also been a growth in companies specialized in providing technical support to other
organizations.

(iv)

IDENTIFYING PROSPECTS IN CENTRAL EUROPE

The targets/prospects in central Europe were identified on the basis of the formulated strategies.
For this purpose, following things were taken into consideration:
The target company must be either a small or medium sized enterprise.
The target companys services or products should be such that may require a mobile
application.
The person to be contacted in these target companys must be the decision maker of the
company i.e. the one who has the authority to take a decision.
The email-ids of the decision makers i.e. CEO/ CFO/ COO/ CTO/ CIO/ MD/ VP, must
be collected for the purpose of contacting them.
The decision makers of the targeted companies can also be contacted through LinkedIn or
FaceBook or Twitter. Generally, it has been observed that majority of the decision makers are
active on LinkedIn due to which it is convenient to contact them through InMail. For this
purpose, an account for offshore partnership has been created on LinkedIn. This resulted in a
positive response by successfully making contacts with the decision maker of an IT company
through InMails.

(v)

PREPARING THE NEWSLETTER

Once the prospects in central Europe were identified and their contact details were collected, the
next step is the preparation of the newsletter that is to be sent to these prospects. The newsletter
conveys the specifications of Pariksha Labs and its service offerings. The screenshot of the
newsletter is as shown below:

(vi)

PITCHING TARGET CUSTOMERS (MAILER)

The mailer for offshore development partnership to be sent to clients of Germany, Switzerland,
Australia, Denmark, Belgium, Finland, Sweden & South Africa has been prepared, consisting of
the expression of interest for partnership with these clients. Furthermore, follow-up action is
taken after receiving suitable replies from the respective clients.
The mail consisting of the newsletter for the offshore development (business) partnership has
been sent to clients of Switzerland, Belgium, Australia, Germany, Finland, Sweden, Denmark &
South Africa on the email addresses that have been collected during the data collection stage.
The mails have been sent through a mailer that has been purchased by Pariksha Labs from
Amazon, known as amazonses.
Amazonses is a tool used for data analysis which can be used to send large amount of e-mails at
a particular time. However, it comes with a limitation that not more than a few thousand mails
can be sent in one particular day. But, ignoring this limitation, this tool is very effective in
analyzing the reliability & validity of the data so collected. Apart from sending mails, it can also
be used to generate reports on the basis of the mail recently sent.
After sending the mails through amazonses.com, the generated reports convey the exact number
of customers clicking on the link provided in the newsletter along with their details. It provides
the information regarding the number of customers opening the mail, the number of customers

unsubscribing from receiving future mails as well as the customers who have marked the mail as
a spam. Therefore, the tool amazonses.com is very helpful in pitching the target customers.

(vii)

CRM ACTION/UPDATE

After running the mailer successfully for the various countries of central Europe, the CRM
template is prepared for recording the responses gathered through the generated report.
A. CRM TEMPLATE PREPARED FOR SWITZERLAND

B. CRM TEMPLATE PREPARED FOR BELGIUM

C. CRM TEMPLATE PREPARED FOR AUSTRALIA

D. CRM TEMPLATE PREPARED FOR GERMANY

E. CRM TEMPLATE PREPARED FOR DENMARK

F. CRM TEMPLATE PREPARED FOR FINLAND

G. CRM TEMPLATE PREPARED FOR SWEDEN

H. CRM TEMPLATE PREPARED FOR SOUTH AFRICA

(viii)

MAILER RESPONSE ANALYSIS & FOLLOW-UP

The response generated from the mailer has to be followed by a follow-up. Once the number of
customers who seemed to be interested in strategic business alliance with Pariksha Labs, are

known, the next step is to follow-up. As part of a follow-up, a thank you mail as an expression of
gratitude is sent to these customers. Furthermore, through the generated report the genuine
contact detail of the targeted customers becomes known which is useful in sending the iteration
mail to these customers.
One of the most common limitations of e-mails is that the mails can often go unnoticed as the
employees/ decision makers of the organization may not have the relevant time. So, in this case
the iteration of sending the mail is done.
Follow-up may also include replying to the customers who may be interested in being our
offshore partners. Sometimes, it includes answering to the queries of the customers. Therefore,
follow-up is an important activity that has to be done after analyzing the response from the
mailer as this activity paves way for the future course of action.

DATA COLLECTION
The data for this project has being collected through:
PRIMARY DATA

For the purpose of this project such data are mostly collected from LinkedIn. Profiles of
different companies in various countries are studied from their websites and therefore
their contact details are retrieved for the purpose of connecting with them in the initial
stages of STRATEGIC BUSINESS ALLIANCE.
COLLECTION PROCESS
The purpose of collecting data is to solve the problem at hand. The problem for this
specific project is to find a suitable channel to contact the decision makers
(CEO/CFO/COO/MD/VP) of the companies, keeping in mind that nobody would like to
receive the unsolicited calls. In order to serve this purpose the Inmail is considered as the
best channel for connecting directly with the decision makers.
SECONDARY DATA
Such data are mostly collected from company directories of various countries. The
company directory used for this purpose is SIREH.com. The directory contains a list of
all the IT companies in a country. By clicking on the link provided, the website of the
concerned companies can be accessed from where the contact details of decision makers
can be collected.
COLLECTION PROCESS
The data collection process is very much involved with searching of the email addresses
of the decision makers of various IT & consultancy companies in the targeted countries
(Refer to Appendix A, B, C, D, E, F, G & H). The whole process of preparing the data
consisting of the email addresses includes the use of the following:a) The websites of the concerned companies.
b) The Facebook profiles of the decision makers.
c) The blogs of the decision makers or any article contributed by them & published
on internet.
d) The company directory of various countries (Germany, Australia, Switzerland,
Denmark, Belgium, Finland, Sweden & South Africa) available online.

ANALYSIS & INTERPRETATION

The data analysis is basically done for two purposes which are as follows:-

(a) ANALYZING THE OFFSHORE DATA

It cannot be denied that this kind of information collected is biased, which is called as
measurement biasdeliberate or intentional distortion of data or changes in the way data are
collected, which are difficult to detect. Deliberate distortion occurs when data are recorded
inaccurately on purpose. It is further pointed out that the changes in methods of collecting data
also introduce measurement bias. However, to some extent, it can also be a useful source to get
the information as the analysts are generally more experienced with deeper insights, and they are
generally having a more objective stance.
It can be further noted that the onshore data so collected from internet is analyzed to ensure:

Reliability
Validity
Completeness
Usefulness/Concreteness

(b) ANALYZING THE BUSINESS MODELS OF OFFSHORE COMPANIES

It is extremely important to analyze the business models/ work culture of the offshore companies
so as to gain a complete and real insight into their business processes before indulging into
partnerships with them. Note that a comparison between the two analyzing results from the
offshore data and business models of offshore companies intends to provide a more complete,
holistic and contextual portrait of the project under study after checking & validating the
information and examining it from different angles.
(c) ANALYZING THE GENERATED REPORT
The report which is generated automatically after sending mail consisting of the newsletter for
offshore development (business) partnership can be studied as well as analyzed to check for the
reliability & validity of the data with respect to the following:Number of recipients
Number of recipients who have opened the mail
Number of recipients who have still not opened the mail
Number of recipients who have unsubscribed from receiving such mails in future
Number of recipients who have clicked on the link provided in the mail (so as to have a
detailed look at our services & offerings. These are the recipients that are to be targeted
by us as they seem to be interested in our proposal for partnership or in need of an
offshore partner.)
Number of recipients who have marked the mail as a spam

 Number of mails that have been bounced (Bouncing of mails is both inevitable &
unavoidable as it takes place under circumstances beyond the human control. However,
only a certain percentage of bounced mails is considered to be natural after which the
tool, amazonses, blocks the mailer from further use.)
This report is very useful in analyzing the data collected as well as it helps to govern our future
course of action (follow-up).

SCREENSHOTS OF A GENERATED REPORT

A. MAILER RUN FOR THE IT COMPANIES OF SWITZERLAND

B. MAILER RUN FOR THE IT COMPANIES OF BELGIUM

C. MAILER RUN FOR THE IT COMPANIES OF AUSTRALIA

D. MAILER RUN FOR THE IT COMPANIES OF GERMANY

E. MAILER RUN FOR IT COMPANIES OF DENMARK

F. MAILER RUN FOR IT COMPANIES OF FINLAND

G. MAILER RUN FOR IT COMPANIES OF SWEDEN

H. MAILER RUN FOR IT COMPANIES OF SOUTH AFRICA

CONCLUSION
A distinction can be made clearly between offshore & onshore partnership:

OFFSHORE PARTNERSHIP
Less revenue is generated
Limited internal resources
Market is competitive

ONSHORE PARTNERSHIP
More revenue is generated
Access to world class capabilities & resources
Market penetration is easy

Further, the results obtained from this approach were positive:

COMPANYS NAME
Anric
TISA
Bevesco

COUNTRY
Australia
USA
Belgium

LIMITATIONS & RECOMMENDATIONS

The project has certain limitations:-

1. DIFFICULTY IN COLLECTING PRIMARY DATA

Since the primary data is collected through LinkedIn, it was difficult to frame the
expression of interest for the purpose of contacting the decision makers. Also, majority of
the decision makers did not use to reply to the In-mails even after visiting the profile on
LinkedIn due to lack of authenticity of the expression of interest.
2. AUTHENTICITY OF SECONDARY DATA
The authenticity of the secondary data so collected was doubtful in terms of:
Reliability
Concreteness
Validity
3. LIMIT TO RUNNING THE MAILER
The mailer used for this purpose (amazonses) could only send a few hundred mails in one
particular day due to fear of the mailer getting blocked as a consequence of a large
number of bounced mails.
A few recommendations given were:
1. PARIKSHA LABS must focus on its core competency or play a key role in developing or
protecting its competitive advantage. This will avoid the threats due to uneven alliances
and creating a potential competitor.
2. PARIKSHA LABS originally did not have a VIEW PORTFOLIO link on their website,
despite of the fact that companys portfolio plays a very important role in offshore
partnership. But, after suggesting them about having a VIEW PORTFOLIO link on the
home page of their website their new website is under construction now.
3. PARIKSHA LABS should not only focus on contacting the decision makers through their
email-ids, a very quick and easy way to contact the decision makers of organizations
abroad is the use of LinkedIn.

BIBLIOGRAPHY

LINKS
http://dk.sireh.com/cat/Computers
file:///C:/Documents%20and%20Settings/Owner/My%20Documents/Listcompanies%20(1).pdf
http://capetown.yalwa.co.za/Computer-Internet
http://iveybusinessjournal.com/topics/strategy/the-five-factors-of-a-strategicalliance#.U_4MtMWSxJk
http://edissertations.nottingham.ac.uk/973/1/07MSclixlj2.pdf
http://faculty.mu.edu.sa/public/uploads/1357369971.463213629463.pdf
http://www.plast.dk/Billeder/udvalg/PFU/DKvirksomhederiVietnam-Q32011.pdf
ARTICLES
International Strategic Alliances: Objectives, Motives & Success By Saleema Kauser
Strategic Alliance of Lenovo & IBM By Lili Jiang
Growing Use of Strategic Alliance By Jay G. Martin, Winstead Sechrest & Minick P.C.
Importance of Strategic Alliances in Companys Activities - By Margarita Iorait
International Strategic Alliance & their Role in Globalisation By Nam-Hoon Kang &
Kentaro Sakai
WEBSITES
www.scribd.com
www.bloomberg.com
www.sireh.com

APPENDICES

APPENDIX A: Data Collected For Pitching the Targets in Germany

APPENDIX B: Data Collected For Pitching the Targets in Australia

APPENDIX C: Data Collected For Pitching the Targets in Switzerland

APPENDIX D: Data Collected For Pitching the Targets in Denmark

APPENDIX E: Data Collected For Pitching the Targets in Belgium

APPENDIX F: Data Collected For Pitching the Targets in Finland

APPENDIX G: Data Collected For Pitching the Targets in Sweden

APPENDIX H: Data Collected For Pitching the Targets in South Africa