L7 Flashcards
(11 cards)
differences JV & alliance
JV:
+more stable
+more flexible
-higher fixed costs
Alliance:
-less stable
-less flexible
+less costs
threats + solutions stability alliance
1) Poor structure (different goals, holdup, spillovers, interference, gridlock)
2) Poor process (values, communication, interface)
Solutions:
1) Structure > design, safeguards, partner selection
2) Process > design, partner selection, assessment
threats + soltutions JV (4)
1) goal conflict (free-riding) > performance aspects
2) holdup (more independent exploits dependent) > hostages, market price transfers, co-specialized assets
3) spillovers (money is transferred out) > lega, partner selection
4) parent interference
scale joint venture + conditions
Complementary assets = similar.
Obtain scale economies in manufacturing, research, distribution.
Conditions: 1) stages need to be vertically integrated 2) scale differs along stages value chain
Link joint venture
complementary assets = NOT dissimilar
Strategic alliance
alliance with foreign rivaling firm. Success measured by competitive strength and not length.
Hard-to-sell/acquire assets (4)
1) Materials, components
2) Know-how (technological ,marketing, country-specific)
3) Distribution services
4) Capital
how limit dependency from alliance (4)
- Don’t replace building FSAs with outsourcing
- Capability losses should be measured (Negative consequences of outsourcing)
- Be aware of cumulative effects (deepening dependence)
- Refine/restrengthen disappearing FSAs ASAP
How limit replicability + unintended FSA sharing:
- Well-defined learning area > formal scope
- Don’t use MNE HQ
- Performance related checkpoints
- Monitor information transfers > gatekeepers
pro’s + con’s early entry (6)
1st mover advantages:
+ Customer + supplier switching costs
+ No-imitable production advantages (learning curve, scale, patents)
+ Input + geographic/product space
1st mover disadvantages:
- Investments to create market
- Followers benefit from their experience
- Rules + regulations
late entry strategies
- Benchmark + sidestep
- Find niche
- Introduce new business / tech