Cooperative Strategy - ANSWERa means by which firms collaborate to achieve a shared objective.
a firm uses this strategy to:
- create value for a customer that it likely could not create by itself
- try to create competitive advantages (a competitive advantage developed through this strategy of...
Cooperative Strategy - ANSWERa means by which firms collaborate to achieve a shared objective.
a firm uses this strategy to:
- create value for a customer that it likely could not create by itself
- try to create competitive advantages (a competitive advantage developed through this strategy
often is called a collaborative or relational advantage)***
- outperform its rival in terms of strategic competitiveness
- earn above-average returns
Strategic Alliance - ANSWERa cooperative strategy in which firms combine some of their resources to
create a competitive advantage.
- involve firms with some degree of exchange and sharing of resources to jointly develop, sell, and
service goods or services
- are used by firms to leverage their existing resources while working with partners to develop
additional resources as the foundation for new competitive advantages
Ex of cooperative behavior that contribute to alliance success:
- actively solving problems
- being trust worthy
- consistently pursuing ways to combine partners' resources to create value
Three major types of strategic alliances that firms use: - ANSWER1. joint ventures
2. equity strategic alliances
3. nonequity strategic alliances
Joint Venture - ANSWERa strategic alliance in which two or more firms create a legally independent
company to share some of their resources to create a competitive advantage.
- have partners who own equal percentages and contribute equally to the venture's operations
- are often formed to improve a firm's ability to compete in uncertain competitive environments
can be effective in:
, - establishing long-term relationships
- transferring tacit knowledge between partners (bc it can't be codified, tacit knowledge is critical to
firms' efforts to develop competitive advantages)
Equity Strategic Alliance - ANSWERan alliance in which two or more firms own different percentages
of a company that they have formed by combining some of their resources to create a competitive
advantage.
- commonly are formed because they want to ensure that they have control over assets that they
commit to the alliance (control of firms' resources, especially intellectual capital, can be quite
important when R&D alliances are formed)
Nonequity Strategic Alliance - ANSWERan alliance in which two or more firms develop a contractual
relationship to share some of their resources and capabilities for the purpose of creating a
competitive advantage.
- are less formal
- demand fewer partner commitments than do joint ventures and equity strategic alliances
- generally do not foster an intimate relationship
between partners
Given the informality and lower commitment levels of this strategic alliance, it is unsuitable for
complex projects where success depends on the transfer of tacit knowledge between partners.
outsourcing commonly occurs through this strategic alliance
Reasons firms develop strategic alliances - ANSWER1. to create value they couldn't generate by
acting independently and entering markets more rapidly
2. because most (if not all) companies lack the full set of resources needed to pursue all identified
opportunities and reach their objectives in the process of doing so on their own
slow-cycle markets - ANSWERmarkets in which the firm's competitive advantages are shielded from
imitation, commonly for long periods of time, and where imitation is costly.
- gain access to a restricted market
- establish a franchise in a new market
- maintain market stability
Fast-cycle markets - ANSWERmarkets in which the firm's capabilities that contribute to competitive
advantages aren't shielded from imitation and where imitation is often rapid and inexpensive
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