Means of achieving strategies

Cooperation Among Competitors

For collaboration between competitors to succeed, both firms must contribute
something distinctive, such as:
1. Technology
2. Distribution
3. Basic Research
4. Manufacturing Capacity
5. Etc.
Risks:
1. unintended transfers of important skills or technology may occur at
organizational levels below where the deal was signed.
2. Firms often give away too much information to rival firms when operating under
cooperative agreements.
 Joint Venture/Partnering
Joint venture is a popular strategy that occurs when two or more companies form
a temporary partnership or consortium for the purpose of capitalizing on some
opportunity.
Examples:
1. Research and development partnerships,
2. Cross-distribution agreements
3. cross-licensing agreements,
4. cross-manufacturing agreements, and
5. joint-bidding consortia.
Which joint ventures and cooperative arrangements are most appropriate for
our needs and expectations?
How do we manage these ventures most effectively?
 Examples of common problem of FAILED joint ventures/partnerships:
1. Managers who must collaborate daily in operating the venture are not involved
in forming or shaping the venture.
2. The venture may benefit the partnering companies but may not benefit
customers, who then complain about poorer service or criticize the companies in
other ways.
3. The venture may not be supported equally by both partners. If supported
unequally, problems arise.
4. The venture may begin to compete more with one of the partners than the
other.
 Merger/Acquisition
A merger occurs when two organizations of about equal size unite to form one
enterprise.
An acquisition occurs when a large organization purchases (acquires) a smaller
firm, or vice versa.
When a merger or acquisition is not desired by both parties, it can be called a
takeover or hostile takeover.
In contrast, if the acquisition is desired by both firms, it is termed a friendly
merger.
 First Mover Advantages
First mover advantages refer to the benefits a firm may achieve by entering a
new market or developing a new product or service prior to rival firms.
ADVANTAGES:
1. Build a firms image and reputation with buyers,
2. Produce cost advantages over rivals in terms of new technologies, new
components, new distribution channels, and so on,
3. Create strongly loyal customers, and,
4. Make imitation or duplication by a rival hard or unlikely.
Outsourcing
Business-process outsourcing (BPO) is a rapidly growing new business that
involves companies taking over the functional operations, such as human
resources, information systems, payroll, accounting, customer service, and even
marketing of other firms.

Reasons: (1) it is less expensive, (2) it allows the firm to focus on its core
businesses, and (3) it enables the firm to provide better services.

ADVANTAGES:
1. Allows the firm to align itself with best-in-world suppliers who focus on
performing the special task,
2. Provides the firm flexibility should customer needs shift unexpectedly, and,
3. Allows the firm to concentrate on other internal value chain activities critical to
sustaining competitive advantage.