LNChap006 - Chapter 6 Lecture Note Beyond Competitive...

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Chapter 6 Lecture Note Beyond Competitive Strategy Other Important Strategy Choices Chapter Summary Chapter Six identifies that once a company has settled on which of the five generic strategies to employ, attention must turn to what other strategic actions can be taken in order to complement the choice of its basic competitive strategy. The chapter contains sections discussing the pros and cons of each of the complementary strategic actions offered. The next-to-last section in the chapter addresses the competitive importance of timing strategic moves – when it is advantageous to be a first-mover and when it is better to be a fast-follower or late-mover. It concludes with a brief look at the need for strategic choices in each functional areas of a company’s business to support its basic competitive approach and complementary moves. Lecture Outline I. Introduction 1. Figure 6.1, A Company’s Menu of Strategy Options, shows the menu of strategic options a company has in crafting a strategy and the order in which the choices should generally be made. II. Strategic Alliances and Collaborative Partnerships 1. Companies in all types of industries and in all parts of the world have elected to form strategic alliances and partnerships to complement their own strategic initiatives and strengthen their competitiveness in domestic and international markets. 2. Globalization of the world economy, revolutionary advances in technology across a broad front, and untapped opportunities in national markets in Asia, Latin America, and Europe that are opening up, deregulating, and/or undergoing privatization have made partnerships of one kind or another integral to competing on a broad geographic scale. 3. Many companies now find themselves thrust in the midst of two very demanding competitive races: a. The global race to build a presence in many different national markets b. The race to seize opportunities on the frontiers of advancing technology 4. Companies may form strategic alliances or collaborative partnerships in which two or more companies join forces to achieve mutually beneficial strategic outcomes. Core Concept Strategic alliances are collaborative arrangements where two or more companies join forces to
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achieve mutually beneficial strategic outcomes. 5. Strategic alliances go beyond normal company-to-company dealings but fall short of merger or full joint venture partnership with full ownership ties. 6. Some strategic alliances do involve arrangements whereby one or more allies have minority ownership in certain of the other alliance members. Core Concept Company use of alliances is quite widespread. A. Why and How Strategic Alliances are Advantageous 1. The most common reasons why companies enter into strategic alliances are to collaborate on technology or the development of promising new products, to overcome deficits in their technical and manufacturing expertise, to acquire altogether new competencies, to improve supply chain efficiency, to gain economies of scale in production and/or marketing, and to
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This note was uploaded on 04/22/2008 for the course ECON 315 taught by Professor Aliemami during the Spring '08 term at University of Oregon.

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LNChap006 - Chapter 6 Lecture Note Beyond Competitive...

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