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MGMT 466 - Ch 9
Cooperative Strategy
29
Management
Undergraduate 4
12/10/2009

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Term
cooperative strategy
Definition
__ is a strategy in which firms work together to achieve a shared objective
Term
strategic alliance
Definition
a __ is a cooperative strategy in which firms combine some of their resources and capabilities to create a competitive advantage
Term
collaborative/relational advantage
Definition
a competitive advantage developed through a cooperative strategy often is called a __
Term
joint venture
Definition
a __ is a strategic alliance in which two or more firms create a legally independent company to share some of their resources and capabilities to develop a competitive advantage These are often formed to improve firms' abilities to compete in uncertain competitive environments. They form long-term relationships and transfer tacit knowledge (knowledge learned through experiences).
Term
equity strategic alliance
Definition
a __ is an alliance in which two or more firms own different percentages of the company they have formed by combining some of thier resources and capabilities to create a competitive advantage
Term
nonequity strategic alliance
Definition
__ is an alliance where 2+ firms develop a contractual relationship to share some of their unique resources and capabilities to create a competitive advantage. Firms don't establish a separate independent company and therefore take no equity positions. Less formal and demand fewer partner commitments. Less tacit knowledge transfer.
Term
strategic alliances
Definition
firms in slow cycle markets often use __ to enter restricted markets or to establish franchises in new markets
Term
fast cycle markets
Definition
firms in __ markets form partnerships to effectively cope with changes occurring in this market setting
Term
standard cycle markets
Definition
in __ markets, alliances are more likely to be made by partners with complementary resources and capabilities
Term
business level cooperative strategy
Definition
a firm uses __ to grow and improve its performance in individual product markets
Term
complementary strategic alliances, vertical and horizontal
Definition
__ are business-level alliances in which firms share some of their resources and capabillities in complementary ways to develop competitive advantages
Term
vertical complementary strategic alliances
Definition
__ is where firms share their resources and capabilities from different stages of the value chain to create a competitive advantage. Often formed to adapt to environmental changes
Term
horizontal complementary strategic alliance
Definition
__ is an alliance where firms share some of their resources and capabilities from the same stage of the value chain to create a competitive advantage.
Term
uncertainty-reducing action
Definition
a __ action is a strategic alliance that is used to hedge against risk and uncertainty, especially in fast-cycle markets or in new product markets or emerging economies.
Term
competition-reducing strategy, tacit collusion and explicit collusion
Definition
__ is a strategic alliance formed to reduce competition. (two types)
Term
explicit collusion
Definition
in competition-reducing strategy, when two or more firms negotiate directly with the intention of jointly agreeing about the amount to produce and the price of the products produced
Term
tacit collusion
Definition
in competition-reducing strategy, when several firms in an industry indirectly coordinate their production and pricing decisions by observing each other's competitive actions and responses. Tends to be sued as a business-level, competition-reducing strategy in highly concentrated industries, such as breakfast cereals).
Term
mutual forebearance
Definition
__ is a form of tacit collusion in which firms don't take competitive actions against rivals they meet in multiple markets
Term
corporate-level cooperative strategy. Diversifying alliances, synergistic alliances, and franchising.
Definition
__ is used to help a firm diversify in terms of products offered or markets served, or both. Three most commonly used: __, __, and __.
Term
diversifying strategic alliance
Definition
__ is a corporate-level cooperative strategy in which firms share some of their resources and capabilities to diversify into new product or market areas
Term
synergistic strategic alliance
Definition
a __ is a corporate-level strategy in which firms share some of their resources and capabilities to create economies of scope. Similar to business-level horizontal complementary strategic alliance, this creates synergy across multiple functions or businesses between partner firms
Term
franchising
Definition
__ is a corporate-level cooperative strategy where a firm uses a contractual relationship to describe and control the sharing of its resources and capabilities with partners. The corporation allows the other guy to sell its products or do business under its trademarks in a given location for a specified period of time.
Term
cross-border strategic alliance
Definition
a __ is an international cooperative strategy in which firms with headquarters in different nations decide to combine some of their resources and capabilities to create a competitive advantage
Term
network cooperative strategy
Definition
a __ is a cooperative strategy wherein several firms agree to form multiple partnerships to achieve shared objectives
Term
stable alliance network
Definition
a __ is formed in mature industries where demand is relatively constant and predictable. Firms use this to try to extend their competitive advantages to other settings while while continuing to profit from operations in their core, relatively mature industry.
Term
dynamic alliance network
Definition
a __ is used in industries characterized by frequent product innovations and short product life cycles
Term
network cooperative strategy
Definition
a __ is a cooperative strategy wherein several firms agree to form multiple partnerships to achieve shared objectives
Term
1. partner may act opportunistically 2. firm has misrepresented its competencies 3. firm fails to make available to its partners the resources and capabilities that it committed to the cooperative strategy 4. firm may make investments that are specific to the aliance while its partner doesn't
Definition
competitive risks with cooperative strategies
Term
cost minimization, opportunity maximization
Definition
two management approaches for cooperative strategies
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