When does a business need a collaboration?
It usually happens when individual company activity and company growth or development run into obstacles.
Is a corporation or a collaborative cooperation a denial of competition?
No, it is one of its forms.
What are some examples of individual company activity?
source material supply, research-development, market, sale, effectiveness issue, technological
What are the three categories according to spatial extent?
vertical, horizontal, diagonal or intersectional
What is the correct arrangement of the product chain?
suppliers, producers, processors, wholesalers, retailers
What are the two ways of vertical collaboration?
forward and backward
When does a forward-type collaboration become more effective?
a) when the number of quality distributors is low
b) when current distributor-processors are unreliable or expensive
c) when profitability of product distributors is high
When does a backward-type collaboration become justified?
a) when suppliers expensive or unreliable
b) when the number of suppliers is low and profitability is high
c) when safe and raw material supply is important to a company
What are some forms and names of vertical collaborations?
a) vertical outworking system
b) work agreements
c) contractual delivery services
d) vertical disintegrated subcontractor relationships
e) relationships based on know-how and license contracts
f) franchise types
g) clusters
h) associations
i) strategic associations
j) interprofessional organisations
What is in a horizontal collaboration?
It is a cooperation with competitors within a sector in one segment of the product chain
What are the benefits of horizontal collaboration?
a) increase economies of scale and market share
b) cut costs
c) offer mutual research and development benefits
d) joint procurement
e) sales
What are some forms and names of horizontal collaborations?
a) horizontal outworking system
b) work agreements and contractual delivery services
c) regional associations
d) consortiums
e) associations
f) partial producer organizations
g) purchase and sales groups
h) clusters
i) strategic associations
j) machinery rings
What is the main focus of a vertical collaboration relationship?
the company’s customers and suppliers
What is the main focus of a horizontal collaboration relationship?
same sector or industry
What is the main focus of a diagonal or intersectional collaboration relationship?
different sectors, different industries
What is in a diagonal collaboration?
It is the cross-sectoral cooperation without production chain or line relations.
What are the benefits of diagonal relationships?
a) development of new activities
b) creation and satisfaction of new customer demands
c) efforts of companies on diversification
d) concentration of areas of activity or sectors
e) modification of the industrial structure
f) protection against substantial market shares
True or False
Diagonal relationships are frequently used to place a product on the market through the partner’s distribution chain.
True
What are some names and forms of diagonal collaboration relationships?
a) regional associations
b) consortiums
c) association
d) research and development enterprises
e) risk-capital investors
f) organisations
What are the types of collaborations according to capital-concentration?
a) with capital-concentration
b) without capital-concentration
What is the essence of relationships without capital concentration?
There is no asset concentration built up between cooperative businesses.
What is the decision-making process in a collaboration without capital concentration?
Autonomous
In this collaboration, they continue to retain their responsibilities in such a way that they commit to enter into contracts with one another but decision-making process remains autonomous.
Collaboration without capital-concentration
The enterprise in a collaboration without capital concentration have the capacity to decide ________ on how to cooperate.
voluntarily
The cooperation between two or more partners is achieved through the mobilization of resources and mutual consideration of their interests to the benefit of the participants
Autonomous Cooperation
The common objectives in cooperation allows the partners to become aware of the __________ and act accordingly.
interdependence
True or False
In an autonomous cooperation, the business activities are coordinated while the removal of legal autonomy takes place.
False
In this enterprise, no other company or business is involved
Autonomous Enterprise
In this enterprise, companies have significant financial interest and voting power without direct or indirect control of the other.
Partner Enterprise
What are the two unique qualities in a partner enterprise?
significant financial interest and voting power
When can you consider a collaboration as a cooperation?
It operates without capital concentration and maintains interdependence of parties but it excludes hierarchical relationship.
What do you call a cooperation that forms without maintaining autonomy?
Integration
The essence of _________ is that company A obtains majority ownership in company B or exercises massive influence that company B will not be able to bring or implement autonomous decisions
Integration
What are the three criteria that can make two or more enterprises considered to be related enterprises?
a) one company owns majority of the shares or voting rights in another company
b) one company is entitled to appoint or dismiss a majority of another company, a governing or supervisory body
c) a contract between companies or a provision in their statuses allows one of them to exercise a dominant influence over the other
What are the four types of integrations?
a) backward vertical integration
b) forward vertical integration
c) horizontal integration
d) diagonal integration or diversification
It is acquiring ownership or control over the suppliers of the business
Backward Vertical Integration
It is acquiring ownership or control over the distributors or retailers of the company’s products
Forward Vertical Integration
It is acquiring ownership or control over the competitors
Horizontal Integration
It is acquiring ownership or control over other operators in the sector
Diagonal Integration or Diversification
Give some examples of companies using horizontal integration
a) Amazon and Whole Foods
b) Porsche and Volkswagen
c) Kraft Foods and Cadbury
d) PepsiCo and Quaker Oats
e) Pfizer and Pharmacia Corporation
f) HP and Compaq
g) Oracle and PeopleSoft
h) JPMorgan Chase and Bank One
i) Microsoft, Taleo and Yahoo
j) Apple and AuthenTec
What are the two types of integrations concerning methodology?
Merging and Acquisition
What are the five benefits of vertical integrations?
a) planned coordination of inputs for joint purchases
b) end products of some elements can be used as a raw material in the next element of integration
c) integrated enterprise information system and logistics
d) larger volume and wider range of products acquired by trade can be efficiently solved in an integrated system
e) potential for profit is added
How can you reduce overheads in a vertical integration system?
You integrate enterprise information system and logistics
Where can you acquire a larger volume and wider range of products in an integrated system?
Trade
What is the effect of using the end products of some elements in the product chain as the raw material in the next element of integration?
better capacity utilization, lower cost and more efficient use of labor
What is the effect of having planned coordination of inputs for joint purchases?
Cost Reduction
When you integrate enterprise information system and logistics, you are reducing ____________
overheads
True or False
All collaborations are either cooperation or integration.
True
Collaborations may be ____, _____ or _____ connections
vertical, horizontal, diagonal
The degree of interdependence may be _____, _____ or _____ associates
autonomy, partner, linked