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Cooperative Strategy

Chapter Ten

The Strategic Management ProcessChapter 5Bus. - LevelStrategyChapter 6CompetitiveDynamicsChapter 9InternationalStrategyChapter 8Acquisitions &RestructuringChapter 11CorporateGovernanceChapter 12Structure& ControlChapter 13StrategicLeadershipChapter 14Entrepreneurship & InnovationThe Strategic .Management .ProcessChapter 7Corp. - LevelStrategyChapter 5Bus. - LevelStrategy

Cooperative StrategyKnowledge Objectives:1. Define cooperative strategies & explain why firms use them.2. Define & discuss three types of strategic alliances.3. Name the business-level cooperative strategies & describe their use.4. Discuss the use of corporate-level cooperative strategies & describe their use.5. Understand the importance of cross border strategic alliances as an international cooperative strategy.6. Describe cooperative strategies risks.7. Describe two approaches used to manage cooperative strategies.

A Cooperative Strategy

A strategy in which firms work together to achieve a shared objective.

Strategic Alliances

Alstream Inc. Microcell & NR CommunicationsRIM - Research in Motions Blackberry services used on wireless devices worldwide.Domtar & Cascades formed NorampacTypes of Strategic Alliances

Standard Cycle MarketFast Cycle MarketSlow Cycle MarketReasons for Alliances by Market Type

Business-level Cooperative Strategies

Vertical & Complementary Strategic Alliances

Explicit Collusion: When firms directly negotiate production output & pricing agreements in order to reduce competition.Competition Reduction Strategies Often illegal types of cooperative strategy which are used to reduce competition.Types of Business-level Strategic Alliances

Mega Bloks agreement with Disney.Siemens & Fujitsu Fujitsu Siemens Computers sharing technical resources & capabilities.Types of Business-Level Strategic Alliances

Boston Pizza with 200 restaurants in Western Canada.Cisco Systems has many synergistic strategic alliances.Flynn Canada created strategic alliances with U.S. contractors.Types of Corporate-level Strategic Alliances

Host partner knows local market & customs. However....International Cooperative Strategies Allows risk sharing by reducing financial investment. International alliances can be difficult to manage due to differences in management styles, cultures or regulatory constraints. Must gauge partners strategic intent so they do not gain access to important technology and become a competitor.

Network Cooperative Strategy

Alliance network types:

Stable Alliance network Built for the exploitation of economies available between firms.Dynamic Alliance network Used in industries characterised by frequent product innovations & short product life cycles.

Competitive Risks With Cooperative Strategies

Managing Risks in Cooperative Strategies

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