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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.
• 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
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
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
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This document was uploaded on 03/05/2014.
- Spring '14