16-07-2012, 01:10 PM
Cooperative Strategy AND Its Competitive Advantages
ppt on cooperative strategy.ppt (Size: 216 KB / Downloads: 31)
Cooperative Strategy
Cooperative Strategy
A strategy in which firms work together to achieve a shared objective
Cooperating with other firms is a strategy that:
Creates value for a customer
Exceeds the cost of constructing customer value in other ways
Establishes a favorable position relative to competitors
Strategic Alliance
A primary type of cooperative strategy in which firms combine some of their resources and capabilities to create a mutual competitive advantage
Involves the exchange and sharing of resources and capabilities to co-develop or distribute goods and services
Requires cooperative behavior from all partners
Business-Level Cooperative Strategies
Complementary strategic alliances
Vertical
Horizontal
Competition response strategy
Uncertainty reducing strategy
Competition reducing strategy
Competition Response Strategy
Occur when firms join forces to respond to a strategic action of another competitor
Because they can be difficult to reverse and expensive to operate, strategic alliances are primarily formed to respond to strategic rather than tactical actions
Competition Reducing Strategy
Created to avoid destructive or excessive competition
Explicit collusion: when firms directly negotiate production output and pricing agreements in order to reduce competition (illegal)
Tacit collusion: when firms in an industry indirectly coordinate their production and pricing decisions by observing other firm’s actions and responses