The German METRO Group1, the world's third largest retail chain at the time, decided that a way to differentiate itself from its competition was to apply more technology in its stores. In conjunction with Intel, one of its major technology suppliers, in 2001 it came up with the Future Store Initiative (FSI). At FSI, the partners intended to build the supermarket of the future in a real-life setting.

More than 50 partners were invited to contribute their ideas and technologies. METRO was careful to invite only those partners it knew well. Moreover, when certain competencies were missing, METRO relied upon partners to bring in their best relationships, leading friends of friends to join the network.

A critical technological issue facing the firms was the development of an RFID (radio frequency identification) standard and interoperability for supermarkets. The new standard would open up a new market, allowing the technology partners to sell new technologies into the supermarket sector. Moreover, partners were invited to contribute any ideas that might enhance the shopping experience. Partners proposed technologies such as personal shopping assistants, intelligent scales, self- checkout, electronic advertising displays, and information terminals. The Future Store Initiative also represented an opportunity for partners to demonstrate their technologies in practice. Some leading firms which took part in the alliance:

TechnologyFirm

-RFIDCheckpoint

-Retail TechnologyMettler Toledo

-Brands (consumer goods)Coke, Danone, Henkel

-IT tech. & serviceCisco, Fujitsu, IBM, Siemens

-SoftwareMicrosoft, SAP, Oracle

-OtherAccenture, DHL, Visa

Three levels of partnership were defined: Platinum, Gold, and Silver. Partners were also asked to make a financial contribution to the project which financed the marketing of project outcomes. However, partners were free to decide on how much staff and resources they would make available. People working for the Initiative were also required to be present on-site.

An executive committee was created consisting of Platinum partners and METRO. Four project teams were also created, focusing upon the four areas for innovation identified by the Initiative: comfort shopping, smart checkout, in-store information, and supply chain management. A METRO project manager headed each project team. Multiple innovation projects were performed within each project team, and each innovation project had its own project manager.

In 2002 an existing store was stripped and an aggressive target for reopening it (April 2003) was set. To keep the network vital, METRO continued to set new challenges, such as creating an RFID center to showcase technologies. It also introduced new partners into the alliance, keeping the alliance fresh, gaining access to new ideas, and signaling to existing partners that they could not rest on their laurels.

1. de Man, D & de Man, A-P. 2013. Alliances: The executive guide to designing strategic partnerships

Question 1

What opportunity in the environment suggests that collaboration among a number of parties will be necessary?

Group of answer choices

The need for technical standards and interoperability in RFID

The trend toward online marketing and fulfillment of groceries

The polarization of wealth and incomes, reducing the middle class

The increased baby-boomer population

The "offshoring" of labor

Question 2

Your book stresses the importance of the "boundaryless" organizational design. With regard to the Metro Group, this structure is achieved via a(n)

Group of answer choices

a. Acquisition

b. Backward vertical integration

c. Multiparty strategic alliance

d. Internal development

e. Forward vertical integration

Question 3

Why would Metro Group choose this particular corporate-level strategy over others?

Group of answer choices

To assemble all of the components via M&A would be very difficult as some firms are large (e.g., Intel) and many firms would need to be acquired.

Only one value chain activity (technology development) is needed, not the entire organization.

Some of the technologies are not likely part of the Metro Group core competences

Even if it were possible to develop them internally, the technologies might take a long time to develop.

All of the above

Question 4

Suggestintangibleresources (strengths) that the Metro Group leveraged to successfully execute this particular corporate-level strategy.

Group of answer choices

Excellent relationships with technology suppliers, including Intel's experience in building R&D collaborations

A physical space (the stripped-down Future Store) in which experimentation, learning, and integration of knowledge might occur.

The data analytics algorithms the Metro Group utilized to streamline its operations.

a & b only

All of the above

Question 5

How is the FSI structured to support the integration of knowledge from various sources?

Group of answer choices

Teams are an integrative device.

The hierarchy is an integrative device.

Being present on-site (collocated) helps with collaboration.

Being colocated in a stripped-down store (a discursive space) facilitates collaboration

All of the above

Question 6

How does the way FSI is structured support the experimentation and learning necessary to build an innovative new store?

Group of answer choices

It continuously introduces new partners into the alliance

Metro Group was the world's third largest retail chain at the time

Metro Group continued to set new challenges

The FSI takes on a matrix organizational form

It is decentralized, permitting partners considerable latitude