BUS350 - Ch.11

Strategicalliancescangivecompetitorslowcost

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Unformatted text preview: e low cost pressures and low pressures for local responsiveness. 31 of 40 The Evolution of Strategy Question: Is the choice of strategy static? As competition increases, international and localization strategies become less viable. To survive, firms may need to shift to a global standardization strategy or a transnational strategy in advance of competitors. 32 of 40 Strategic Alliances Question: What is a strategic alliance? Strategic alliances refer to cooperative agreements between potential or actual competitors. Examples include • formal joint ventures • short term contractual arrangements The number of international strategic alliances has risen significantly in recent decades 33 of 40 The Advantages of Strategic Alliances Question: Why form a strategic alliance? Strategic alliances are attractive because they • facilitate entry into a foreign market • allow firms to share the fixed costs (and associated risks) of developing new products or processes • bring together complementary skills and assets that neither partner could easily develop on its own • can help establish technological standards for the industry that will benefit the firm 34 of 40 The Disadvantages of Strategic Alliances Question: What are the drawbacks of strategic alliances? Strategic alliances can give competitors low‐cost routes to new technology and markets. Unless a firm is careful, it can give away more in a strategic alliance than it receives. 35 of 40 Making Alliances Work Questi...
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This document was uploaded on 03/05/2014.

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