Ch09MBA - Chapter 9: Cooperative Strategy Overview:...

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1 Chapter 9: Cooperative Strategy Overview: Cooperative strategies and why firms use them Three types of strategic alliances Corporate-level cooperative strategies in diversified firms Cross-border strategic alliances’ importance as an international cooperative strategy Network alliances
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2 Introduction Cooperative strategy A strategy in which firms work together to achieve a shared objective One of 3 means firms use to grow and improve performance (mode) Internal development, mergers and acquisitions, and cooperation Core and critical parts of firms strategies today Has implications for a firm’s corporate, business, and international strategy Competitive advantage and above average returns Collaborative or relational advantages
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3 Primary Type of Cooperative Strategy: Strategic Alliances Strategic Alliance A cooperative strategy in which firms combine some of their resources and capabilities to create a competitive advantage Involve firms with some degree of exchange and sharing of resources and capabilities to co-develop, sell, and service goods or services 3 major types of strategic alliances Joint Venture Two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage Partners typically own equal percentages and contribute equally to the ventures operations
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4 Primary Type of Cooperative Strategy: Strategic Alliances 3 major types of strategic alliances Equity Strategic Alliance Two or more firms own different percentages of the company they have formed by combining some of their resources and capabilities to develop a competitive advantage Nonequity Strategic Alliance Two or more firms develop a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage Licensing agreements Distribution agreements Supply contracts Outsourcing commitments A separate independent company is NOT established
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5 Reasons Firms Develop Strategic Alliances Why firms develop strategic alliances They allow partners to create value that they couldn’t develop by acting independently They allow partners to enter markets more quickly and with greater market penetration possibilities Most firms lack the full set of resources and capabilities needed to reach their objectives They are a prime vehicle for firm growth – mode of entry into new product or geographic markets Can account for 25% of sales revenue in large firms
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This note was uploaded on 07/31/2011 for the course MAN 6782 taught by Professor Marlin during the Spring '11 term at University of South Florida - Tampa.

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Ch09MBA - Chapter 9: Cooperative Strategy Overview:...

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