Key Success Factors of a Strategic Alliance
- Sep 10
- 5 min read
Demonstrated by the VW-AWS DPP Partnership
This article discusses the successful long-term partnership between Volkswagen Group (VW) and Amazon Web Services (AWS) in their Digital Production Platform (DPP) initiative. The partnership, which was extended for another five years in 2025, exemplifies a Strategic Alliance between two industry leaders with very different histories and cultures.
Authored by Stefan Herbert and Dr. Martin Hofmann, the article outlines several key success factors that contributed to the partnership’s achievements
Strategic Alliance Definition
At Disruption Selling we differentiate 4 Value Stages with Commodity at the lower and Strategic Alliance at the upper end of the scale.
Strategic Alliances are of symbiotic nature. Both partners succeed or lose, there is no win-lose. Strategic Alliances must be based on a joint vision that exceeds the initial timeline as a northstar to be aimed for. The focus must be on value to the final customer and not just on the two partner’s internal business metrics. And last but not least, the decision makers on both sides must be on Executive Board level.
Success Factor #1: Working Backwards From the Customer
VW serves a global customer base with automotive products and services from consumers up to large fleet managers via wholesalers, distributors, dealers, and sales agents across 12 brands. Physical products are produced in more than 120 plants globally based on a combination of channel forecasts and individual sales orders.
As a result, VW brands must deal with an enormous number of variants and highly individual configurations while generating economies of scale through the usage of common platforms. As the products range from mass market (VW brand, Skoda, Cupra) all the way up to luxury (Bentley, Lamborghini) there is also a wide span in quality expectations production must meet.
Working backwards from the customer, VW and AWS recognized that their engagement model had to be extremely flexible to meet these highly different expectations and that it could not have been fixed in the initial contract.
To reflect this requirement, VW and AWS agreed to only specify the input (headcount, budgets, assets, know-how) both partners would bring to the alliance, but not the output the alliance was expected to produce.
Success Factor #2: Joint Vision
Of course there needed to be a scope definition for the partnership providing the guardrails for the later definition of the desired outputs. While the joint vision was already agreed high-level by the time of contract closure, it needed to be formulated in the very detail right at the beginning of the partnership.
The tool for jointly defining this vision was AWS’ format of a Northstar Document, a 6 page narrative where dozens of Executives from both parties agreed on in a series of workshops in writing.
There were areas where VW’s and AWS’ culture was at opposite ends, but there were two where it was completely identical: a global yet highly decentralized organization.
The Northstar Document reflected this by defining the Digital Production Platform (DPP) to be built as a globally managed horizontal platform with centralized core services upon which each plant was allowed to build their use cases in whatever way they wanted. It was up to the partnership to prove the added value of the DPP to the plants, it couldn’t be forced down on them.
Success Factor #3: Symbiotic Relationship
A standard customer/supplier relationship has a built-in antagonism by default: the customer wants to minimize the spend with the supplier while the supplier wants to maximize it.
AWS’ pricing model is consumption-based meaning that customers pay for what they used AFTER they used it. This was also agreed for the DPP so there were no fixed costs, just variable costs to VW Group. In order to maximize AWS’ return from the partnership they had to convince each and every single plant of the value of using AWS-powered use cases.
Except for kick-starting group-wide developments VW’s budgets are allocated completely decentral so the costs of running the DPP had to be funded voluntarily by the plants. This put the VW/AWS team in the same spot: only convincing the plants of the DPP’s value would generate the funds for building and operating it.
VW Group and AWS would either succeed in this or lose together.
Success Factor #4: Executive Sponsorship
On VW’s side the decision was owned by then-Porsche CEO Oliver Blume (today VW Group CEO) and then-CEO Andy Jassy on AWS side (today Amazon CEO).
Since 2013 AWS had established itself as a leading public cloud provider at VW powering a number of critical workloads at several VW brands already. This 5-year track record of a reliable and scalable provider delivered the trust base the Strategic Alliance required.
Success Factor #5: Strong Bottom-up Support Across Both Organizations
The executive sponsorship described above was complemented by a large and enthusiastic AWS community at VW Group spanning brands, functions, and geographies resulting in significant momentum right from the beginning of the partnership. While Strategic Alliances must be initiated and driven top-down, they need to meet strong bottom-up momentum from the very early days.
Success Factor #6: Cultural Alignment
As described above, VW’s and AWS’ corporate culture couldn’t have been further apart except for a global yet decentral mindset. The key to success was to embrace the differences in culture as a complementary asset rather than a dividing obstacle.
VW was eager to understand and adopt Amazon’s culture of innovation, a willingness to take risks, to drive change and to let the customer rule. For AWS, the partnership provided the world’s biggest opportunity to learn about the most complex global supply chain and its manufacturing challenges.
The appreciation of each other’s history and culture attracted attention and the best talents on both sides to invest not only effort but also passion into the partnership and to overcome the massive hurdles this unmatched undertaking was about to face.
Success Factor #7: Flexibility
Jeff Bezos is quoted with "You need to be stubborn on your vision, but very flexible on the details" and the DPP team took this at heart.
There were several occasions where the vision was about to get lost in day-to-day struggles and where the team had to pull out the Northstar Document to get back on track. Numerous detours had to be taken and patience was stretched thin more than once. However, the joint vision established and written down during the very first months of the journey kept providing the common goal both parties could agree on again.
Summary
The VW–AWS DPP alliance shows that large-scale strategic partnerships succeed when they are built on a clear joint vision and flexible structures that evolve with customer needs, and when they align incentives so both parties win only by creating real value. They must combine top-down executive sponsorship with bottom-up enthusiasm, embrace cultural differences as complementary assets, and remain steadfast on the long-term goal while adapting the details along the way.
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