Cooperative strategy Firms work together to achieve shared objective as well as

Cooperative strategy firms work together to achieve

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Cooperative strategy Firms work together to achieve shared objective as well as furthering their individual objectives by Global Strategic Alliances Kodak CEO states that” Kodak is involved with partnerships that would have been unthinkable few years earlier” In Insurance Sector, when it opened up, almost many Indian Cos. Got into cooperative strategy with leading foreign insurance Cos. Advantage: “Competitive advantage thru collaborative or relational advantage” Cooperative Strategies at IBM By cooperating with others IBM can leverage core competencies to grow and improve performance Business Systems Group Develop leading-edge technology Formed five alliances Partners provide over 250 scientists and engineers that work with IBM’s own to fuel innovation Business Analytics Group Created unit to manage data and improve decisions Software solutions through small firm partnerships Overall shift to hardware, solutions, software Global Strategic Alliances Advantages Facilitate entry into foreign markets. Enable partners to share fixed costs and risks associated with new products and processes. Facilitate transfer of complementary skills between companies. Help establish technological standards. Disadvantages Risk of giving away technological know-how. Risk of opening local market access to foreign alliance partner. Risk of not getting anything in return. Key drivers for strategic fit between alliance partners are the following: Partners must agree on fundamental values and have a shared vision about the potential for joint value creation. Alliance strategy must be derived from business, corporate and functional strategy. The alliance must be important to both partners, especially to top management. Partners must be mutually dependent for achieving clear and realistic objectives. Joint activities must have added value for customers and the partners. The alliance must be accepted by key stakeholders. Partners contribute key strengths but protect core competencies.
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Example – Successful Strategic Alliance Hewlett-Packard and Disney This alliance formed back when Mr. Hewlett, Mr. Packard, and Mr. Disney were all still involved with their respective companies. During the creation of Fantasia, Disney purchased some audio equipment from Hewlett-Packard. The strategic alliance continued onwards, as Disney relied heavily on HP’s development and IT team for its own infrastructure. In fact, at current-day Disney attractions, the Imagineering team is still quite married to the HP systems architecture. During the design and build phase of Disney’s Mission: SPACE, HP engineers and Disney imaginers were working side by side to create the most technologically- advanced ride yet.
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  • Winter '15
  • Rao

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