Upgrade to remove ads
Only $35.99/year

CH. 9 Cooperative Strategy

Terms in this set (32)

Cooperative Strategy
A means by which firms collaborate to achieve a shared objective. Cooperating with others is a strategy firms use to create value for a customer that it likely could not create by itself.
Strategic Alliance
a 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
Included in Strategic Alliances
Joint Ventures
Licensing
Co-development
Co-marketing agreements
equity strategic alliance
non equity strategic alliance
Not included In strategic alliances
Arm-length supply arrangements
Overseas or local subsidiaries
mergers and acquisitions
Types of Strategic Allies
Joint Ventures
Equity Strategic Alliance
Non equity Strategic Alliance
Joint Venture
Two or more firms create a legally independent company by sharing some of their resources and capabilities to create a competitive advantage

Partners own equal percentages and contribute equally to the venture's operations.

Often formed to improve a firm's ability to compete in uncertain competitive environments, and are also effective in establishing long-term relationships and in transferring tacit knowledge between partners
Equity Strategic Alliance
An alliance in which two or more firms own different percentages of the company they have formed by combining some of their resources and capabilities for the purpose of creating a competitive advantage
Non Equity Strategic Alliance
An alliance in which two or more firms develop a contractual relationship to share some of their unique resources to create a competitive advantage

(firms do not establish a separate independent company)
slow cycle markets
markets in which the firm's competitive advantages are shielded from imitation, commonly for long periods of time, and where imitation is costly

Firms in slow-cycle markets often use strategic alliances to enter restricted markets or to establish a franchise in a new market
Fast-Cycle markets
firm's competitive advantages are not shielded from imitation, preventing their long-term sustainability

Unstable, unpredictable, and complex, hyper hypercompetitive

Innovation is critical

Alliances between firms with current excess resources and those with promising resources help companies competing in this market effetely transition into new markets
Standard cycle markets
Competitive advantages are moderately shielded from imitation in these markets

alliances are more likely to make when firms have complementary resources
Business level cooperative strategy
A strategy through which firms combine some of their resources to create a competitive advantage by competing in one or more product markets
Four types of business level cooperative strategies
complementary strategic alliances
-vertical
-horizontal

competition response strategy

Uncertainty-reducing strategy

Competition-reducing strategy
Complimentary Strategic Alliances
Business-level alliances in which firms share some of their resources in complementary ways to create a competitive advantage
Vertical Complementary Strategic Alliance
firms share some of their resources and capabilities from different stages of the value chain for the purpose of creating a competitive advantage
Sets with similar terms