The main question posed in this case is whether Aegis management should continue the relationships with their partners ProPack and POMS, and if they decided to continue with the relationships, how to structure them more effectively. Operating in a slumping economy, Aegis was worried about their level of sales resulting from the partnerships they had entered into. The main goal for Aegis when entering into both partnerships was to bolster sales, and neither company had accomplished that.
With the possibility of terminating either relationship, Aegis would have to find another strategy for improved sales. With the absence of this strategy, it will be more productive for the company to restructure their existing relationships. Looking at this case through the concept of strategic alliances will help to find a strategy that will pull Aegis out of its downhill slide. For both relationships, Aegis has entered into licensing and distribution agreements.
POMS and ProPack have combined their name with Aegis for separate products, as well as working together to distribute each otherâ€™s products. Unfortunately, in this situation economies of scale will not work to lower costs because of the nature of the product and the industry Aegis is competing in. Aegis and its partners have developed a product that is the technological standard for its category, but can continue to add value to the product, making it desirable and useful in the future.
In my opinion, the best way to increase the benefits of these relationships is to foster an environment of trust and communication to operate in. This may mean revisiting the contracts that are in place to redefine what each entity wants out of the agreement, and the best way to go about creating sales. If they can do this effectively I believe the companies will work better together, creating more value for potential customers. This will result in an increase in sales for their products.