Chapter 9Cooperative strategy
Knowledge objectives1Define cooperative strategies and explain why firms use them2Define and discuss three types of strategic alliances3Name the business-level cooperative strategies and describe their use4Discuss the use of corporate-level cooperative strategies in diversified firms
Knowledge objectives5Understand the importance of cross-border strategic alliances as an international cooperative strategy6Explain the cooperative strategies’ risks7Describe two approaches used to manage cooperative strategies
Cooperative strategyDefinitionA strategy in which firms work together to achieve a shared objectiveStrategic alliances:•are a primary type of cooperative strategy•allow firms to leverage their existing resources, capabilities and core competencies while working with partners to develop additional resources and capabilities as the foundation for new competitive advantages.
Three types of strategic alliancesJoint ventureTwo or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage.Equity strategic allianceTwo or more firms own different percentages of equity in a new venture.
Types of strategic alliancesNon-equity strategic allianceTwo or more firms form alliances through contractual agreements given to a company to supply, produce or distribute a firm’s goods or services without equity sharing.
Reasons for strategic alliancesby market type
Business-level cooperative strategyA business-level cooperative strategy improves a firm’s performance in individual product marketsThe combination of resources and the capabilities of partnering firms create competitive advantages that a firm can’t create by itself.
Business-level cooperative strategies
Combine partner firms’ assets in complementary ways to create new value.Two types: • vertical• horizontal.Include distribution, supplier or outsourcing alliances where firms rely on upstream or downstream partners to build competitive advantage.Complementary Complementary strategicstrategicalliancesalliancesBusiness-level cooperative strategies
Business-level cooperative strategiesComplementaryComplementarystrategic strategic alliancesalliancesFirms join forces to respond
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