Submitted by: Nishant Singh (E058)

Corning Inc.
Use of partnerships as a means of achieving strategy
Benefits
Use of complementary resources and capabilities are complementary and thus achieve
objectives that without the U.S. not have been possible.
Efficient use of capital, achieving a high ROI and efficient.
Reducing the risks
Entry into new markets
A variety of horizontal
Cons
Decentralization of control
Lack of business focus
Dependence on allies and exposure to harm their business, not necessarily in business
together. Such as currency fluctuations, credit rating and so on
Use of partnerships as a means of achieving strategy
Corning suffered from lack of compliance with business goals resulting from operational
efficiencies and lower ability to translate internal innovation capability market successful
products
Corning has developed a process of recognition capabilities of potential partners and
markets complementary technologies required.
Also, has developed a distributed management capability that enabled business partners
conduct a separate business unit. Corning evolved over time organizational skills,
managerial, and operational management of business partnerships which enabled Corning
to achieve a unique expertise in this field.
Ground Rules While Looking For Alliances
Cornings Strategy
Speed: Bringing product to the market faster
Getting together with the top person of the partnership firm once or twice in the year
Letting new ventures operate independently without "Corningize it-insisted on results
rather that procedures.
Spread of technology throughout
Integrating at the CEO level rather than only at the management level
Wider span of control-flat structure
Implications of the concept of Corning as an evolving network on the firms
management practice
Flexibility and initiative in the operations
Operational Freedom to each subsidiary and joint venture; Never Corningized its JV
Due to the network formed, small operations all got the attention of the higher
management
The importance of JVs and their impact on the bottom line was realised
Management skills and style required to work across the parent firm and JVs made it
challenging
It led to a more flat and efficient organization.
Corning began to invite people from the JVs in their management meetings, listening to
their business interests and expanding their opportunities
The Three Proposals
1. The Centrifugal Forces in the Laboratory Sciences Sector
Corning sell its share of Ciba Corning (for about $150 million) and use the proceeds along
with additional funding to purchase the three laboratory testing companies-

Submitted by: Nishant Singh (E058)

International Clinical Laboratories: A clinical Laboratory testing firm, for about $300 million
G.H. Besselaar Associates: A pharmaceuticals testing company that evaluated new drugs,
for about $50 million
Enesco: An environmental testing firm, for about $125 million

2. Charting Future Directions in the Communications Sector

Part 1
Invest $100 million in the three-year period 1989-91 in order to expand the U.S. optical
fiber capacity to make the tough new fibers needed to service homes
Part 2
Offer IBM a partnership in PCO in order for PCO to become IBMs preferred second source
for cable terminal peripherals
3. The Conundrum of the Television Glass Business
To sell Asahi 49% of Cornings U.S. television glass business for about $100 million and
channel the proceeds into developing glass for liquid crystal displays
Criteria for evaluating the 3 proposals
Investment Requirement
Ciba Cornings R&D spending in 1988 was $40M only as compared to competitors like
Abbott spent $150M
Profitability
Profitability continued to be low in laboratory testing industry
Competition
Post AT&Ts division
o Market opened to outside suppliers
o Industry capacity tripled
o Fiber prices fell more than 70%
o Drop in Cornings optical Fibre Revenues and profits
Speed of implementation plan
Current grip over the market
o By 1988, Corning had become a leader in the laboratory testing industry
Future potential in the market
o Market for Optical Fibre in local systems was expected to take off by the mid-1990s
o Opportunity to expand in potential international markets like USSR, Europe
o The laboratory testing industry was expected to grow rapidly
o Upcoming technologies: HDTV, Liquid Crystal Displays
Strategic fit and organizational commitment
o Patent Expiring in early 1990s. Needed flexible business strategy in US