hese days, the common management theme T running through business publications is the search for "new business paradigms for the next century." Business has always had to respond to changing markets and technology. Each new era brings a different focus on how an industry and companies must respond to stay competitive. The natural gas industry has seen its share of turbulence, and companies have responded in different ways. In recent years, some of these responses have become so common that companies see them as an easy solution to complex problems.
The strategic alliance concept has become so commonplace that companies turn to it in many situations for which it is inappropriate. This article reviews changes in the industry for which strategic alliances might be used, describes the process to create one, and reveals some of the risks and benefits of using these alliances.
lnevi ta bi I i ty of Change
The natural gas industry will continue to change. Companies within the industry will respond to maintain their competitive edge. Some will survive. Many will not. Those that survive will have done so because they have adapted to their new business environment. The strategies they use will vary.
Reengineering, streamlining, downsizing, core competencies, and the like are now familiar terms to corporate boardrooms and staff. Traditionally, though, each company in a highly competitive business has focused on building its own internal capabilities. Whether as a vestige of antitrust laws or just a reaction to the hard-core competitive nature of the gas industry, companies have usually tried to go it alone.
However, the nature of competition has changed in a more fundamental way than can be accommodated by a company's own internal