Key Points:

1
Key Points Chapter 9 Cooperative Strategy

• Reasons for cooperation
• Types of alliances
• Considerations during partner selection
• Understand the risks of and reasons for success
  and failure of strategic alliances

2
Cooperative Strategies

• Cooperative strategies are one element of a
  firms overall strategy and must fit with other
  strategies
• Coopetition simultaneous competition and
  cooperation

3
Strategic Alliances
Firm A
Firm B
Partnerships between firms
where their
Resources
Capabilities
Core Competencies
are combined to pursue mutual interests to
Develop
Goods
Manufacture
Services
Distribute
4
Types of Strategic Alliances

• Classification by equity
• Joint Ventures
• Equity Strategic Alliances
• Nonequity Strategic Alliances
• Classification by strategy (others listed in
  text)
• Complementary strategic alliances
  (business-level)
• Diversifying strategic alliances
  (corporate-level)
• Synergistic strategic alliances (corporate-level)
• Franchising (corporate-level)

5
Reasons for Alliances (Table 9.1)

• Gain access to restricted markets
• Enter a new market
• Maintain market stability
• Gain market power
• Gain access to complementary resources
• Overcome trace barriers
• Meet competitive challenge from other firms
• Pool resources on very large capital projects
• Learn new business techniques
• Learn technology
• Speed entry (new goods/services or markets)
• Maintain market leadership
• Create an industry standard
• Share risks
• Overcome uncertainty

6
Partner Selection
7
Ingredients for Alliance Success
8
Risks of Alliances

• Opportunism/cheating of partner
• Partner misrepresents capabilities
• Misunderstand partner intentions or partner
  misrepresents intentions
• Partner fails to make resources available
• Poor planning/screening and contract
  specification
• Cultural differences (organizational and
  national)
• Ability to manage

9
Risks of Alliances

• Risks can result in
• Failure of strategic alliance (short-term)
• Loss of firm-specific capabilities and
  competitive advantage (long-term)
• Approaches to managing risks
• Develop trusting relationship
• Use contractual and other monitoring mechanisms