cooperative strategy

Question 1

Joint venture

Answer 1

Create legally independent company to share resources and capabilities

Question 2

Equity strategic alliance

Answer 2

Company purchases partial equity in another business

Question 3

Non-equity strategic alliance

Answer 3

Contractual relationship sharing some resources and capabilities e.g. outsourcing agreements

Question 4

Tacit collusion

Answer 4

Firms do not explicitly state but cooperate to reduce industry output and therefore raise prices

Question 5

reasons for co-operative strategy

Answer 5

Create value couldn’t independently
Enter new markets rapdily
Lack resources to pursue opportunity alone

Question 6

Complementary strategic alliances (horizontal)

Answer 6

Share resources from same stage of value chain

Question 7

Complementary strategic alliances (vertical)

Answer 7

Distribution, supplier or outsourcing relying on up/down stream partners to create advantage

Question 8

Competition response strat

Answer 8

Respond to competitors attacks

Question 9

Uncertainty-reducing strategy

Answer 9

Hedge against risk and uncertainty (typically fast-cycle)

Question 10

Competition-reducing strat

Answer 10

Avoid destructive or excessive competition
Explicit - agree amount output and price
Tacit - Indirectly co-ordinate

Question 11

Synergistic strategic alliance

Answer 11

Share resources to create economies of scope (simultaneous manufacturing different products cheaper than individually)

Question 11

Diversifying strategic alliance
(corporate)

Answer 11

Share some resources to engage in product/ geographic diversification