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May not realize experience curve or location economies
Shared ownership can lead to conflict.
11 Wholly Owned Subsidiary Advantages:
– No risk of losing technical competence to a competitor.
– Tight control of operations.
– Realize learning curve and location economies. Disadvantage:
– Bear full cost and risk.
12 Strategic Alliances Cooperative agreements between potential or actual competitors.
– Facilitate entry into market.
Share fixed costs.
Bring together skills and assets that neither company has or can develop.
– Establish industry technology standards. Disadvantage:
– Competitors get low cost route to technology and markets.
13 Alliances Are Popular High cost of technology development
Company may not have skill, money or people to go it alone
Good way to learn
Good way to secure access to for...
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This note was uploaded on 06/12/2013 for the course BUSINESS 6023 taught by Professor Dr.all during the Fall '12 term at Arkansas State.
- Fall '12