Part II: Cooperation and alliances

Question 1

What are the possible networks types, relative to its topology?

Answer 1

Isolation:
Network clusters without intermediaries cannot access
common resources.

Networking:
Network clusters with intermediaries establish
interconnections to gain additional resources.

Question 2

What are the advantages of collaboration and good networks?

Answer 2

A good network adds value. An understanding of the structure and dynamics of networks is a competitive advantage.

Companies should cooperate in one level of the value chain (R&D) but compete in another (sells).

Question 3

What are motivations for cooperation?

Answer 3

• Cost sharing
• Risk sharing
• Advantages of timing
• Market entry
• Reputation
• Resource access
• Access to Text knowledge and learning

Question 4

What are the types of cooperation?

Answer 4

• Franchising
• Supply contract
• Subcontracting
• Consortia
• Management contract
• Joint venture

Question 5

Describe Franchising and give examples

Answer 5

• Special (strict) form of Licensing
• Cooperation in sales and distribution
• Asymmetric power distribution
• Long lasting relationships

Ex:

• Mc Donalds
• Schülerhilffe

Question 6

Describe supply contract and give examples

Answer 6

• Uni-directional, interorganizational contracts
• Long-term procurement agreements
• Mutual coordination of logistics (e.g. JIT)
• Conjoint development processes
• Risky for supplier

Ex:

• Toyota
• Bosh

Question 7

Describe Subcontracting and give examples

Answer 7

• Outsourcing of activities
• For areas with low strategic relevance
• Concentration on core-activities
• Generally long-term contracts

Ex:

• IBM
• LSG Sky Chefs

Question 8

Describe Consortia and give examples

Answer 8

• Development of major projects
• Limited duration, scale and content
• Risk reduction for the partners
• Regulated through contracts

Ex:
Airbus

Question 9

Describe Management contract and give examples

Answer 9

• Consulting and management services
• Project oriented
• Limited in time and scope
• Principal-Agent problems

Ex:

• McKinsey
• Roland Berger

Question 10

Describe Joint Venture and give examples

Answer 10

• Separate legal entity
• Controlled by one or more of the partners
• Individual strategic orientation
• Organizational linkage of the partners

Ex:

• Merial
• B/S/H/

Question 11

What are the two types of designs modes in an Alliance. Describe them briefly.

Answer 11

• Equity Based:
  Joint ventures result in the formation of a new legal entity.
• Non-equity Based:
  Contractual agreement for cooperation which does not require setting up a new legal entity.

Question 12

What types of Equity modes exist?

Answer 12

• Minority Joint Ventures
• 50/50 Joint Ventures
  Majority Joint Venture

Question 13

What types of Non-equity modes exist?

Answer 13

• Informal cooperative alliances

- Formal cooperative alliances

Question 14

What Alliance design mode has become one of the dominant cooperative?

Answer 14

Non-equity

Question 15

On what different levels does Cooperation takes place in Industry? Whats the simplest form?

Answer 15

• Strategic alliance (The simplest)
• Alliance portfolio (More advanced)
• Strategic network

Question 16

Specify Strategic alliance.

Answer 16

• Formalized, voluntary long-term relationships between two organizations
• Focused cooperation in key areas of the partners
• Contract based with defined scope

Question 17

Focus of strategic alliance?

Answer 17

Dyad

Question 18

Goals of strategic alliance?

Answer 18

• Compensate weaknesses through strengths of the partner
• Secure and improve competitive positioning
• Risk and cost reduction

Question 19

Types of strategic alliance?

Answer 19

• Horizontal:
  Between potential competitors
• Horizontal:
  Alliance with supplier

Question 20

Define Alliance portfolio

Answer 20

The egocentric network of all active (and past) cooperative relationships of a single company

Question 21

Focus of Alliance portfolio

Answer 21

Portfolio on firm level

Question 22

Strategic issue of Alliance portfolio

Answer 22

Configuration of the portfolio, realization of synergies between the different partners

Question 23

Formation of alliance portfolios:

Why do organizations build alliance portfolios?

Answer 23

• Manage risk and uncertainty
• Organizationallearning
• Access to knowledge and other resources from different partners
• Structural and relational embeddedness
• Coevolution with environment

Question 24

Configuration of alliance portfolios:

How do firms configure their portfolio?

Answer 24

• Portfolio size
• Relational and structural factors
• Partner characteristics

Changes in configuration through formation of new ties and termination of existing ones is important

Question 25

Management of alliance portfolios: | How do firms manage their portfolios?

Answer 25

- Build alliance portfolio capability (ability to identify partners, to initiate alliances and to manage them). Research also focuses on the effectiveness of alliance portfolio management tools

Question 26

Define strategic network

Answer 26

The network of strategic alliances from an industry perspective

Question 27

Focus of strategic network?

Answer 27

(Industry-)network

Question 28

Specifics of a strategic network?

Answer 28

- Actors (nodes) are connected through direct or indirect relations (ties) - Number of nodes determines network size, Position of nodes and ties determines the network structure

Question 29

Management of cooperation: | What are the phases of the alliance life cycle?

Answer 29

- Alliance formation and partner selection - Alliance governance and design - Alliance management (post-formation)

Question 30

Challanges of Alliance formation and partner selection

Answer 30

- Partner complementarities - Partner compatibility - Partner commitment

Question 31

Key factors of Alliance formation and partner selection

Answer 31

Screening and partner selection: - Common objectives - Compatible values and behaviors (culture)

Question 32

Challenges of Alliance governance and design

Answer 32

- Equity sharing or ownership - Contractual details - Relational governance

Question 33

Key factors of Alliance governance and design

Answer 33

Negotiation and alliance designing: - Decentralized structure - Process and interface optimization

Question 34

Challenges of Alliance management (post-formation)

Answer 34

- Use of coordination mechanisms - Development of trust and relational capital - Conflict resolution and escalation

Question 35

Key factors of Alliance management (post-formation)

Answer 35

Commitment and trust: - Creating a common identity through collaboration - Communication and information transfer

Question 36

Management of networks: | Dimensions of a network strategy?

Answer 36

``` Objectives Strategic Analysis Configuration Implementation Stabilization ```

Question 37

Objectives of a network strategy

Answer 37

Definitions of objectives and harmonization of individual objectives as premises for a cooperation's success - Transformation of individual to common objectives - Defining network objectives for coordinating network activities - Specification of key figures for a network controlling

Question 38

Strategic analysis of a network strategy

Answer 38

1) Analysis of the overall network structure: - Size - Density - Stability - Groups - Centrality 2) Identification of structural and interactional dimensions: - Intencity - Reciprocity - Multiplexity 3) Identification of key roles: - Bridge - Gatekeeper

Question 39

Configuration of a network strategy

Answer 39

1) Typology of networks: - Ties among legally autonomous companies - Regional networks - (Global) strategic networks 2) Consequences of embeddedness: - Identification of structure and dynamics - Differences in the degree of connectedness lead to different consequences of success 3) Planning of positions - Prominence of actors - Focal actors

Question 40

Implementation of a network strategy

Answer 40

- Determination of the network strategy | - Business model integration

Question 41

Stabilization of a network strategy

Answer 41

- Securing the network structure | - Institutionalizing network management

Question 42

Management practices of a network stabilization

Answer 42

Its a cycle of: 1) Selection - Selection of network partners - Definition of partners’ input - Selection of "Boundary Spanner“ (network managers) 2) Allocation - Distribution of tasks, resources and responsibilities according to the capabilities of network members - Distribution follows the negotiation processes 3) Evaluation - Evaluation at the dyadic level and at the network level - In addition to economic criteria, procedural and distributive justice also play a decisive role 4) Regulation - Development and enforcement of formal and informal rules - Development of incentive systems - Search for win-win situations 5) Go to "1) Selection"