Flashcards in Cooperation Deck (11)
What is the goal with cooperation strategies?
Reach competitive advantage through cooperation with independent business entities that are active in different or similar business areas
What are the main cooperation motives?
- Access to markets and resources
- Timing advantages
- Access to know-how
- Cost advantages
What are the up sides with access to markets and resources?
- Shared use of distribution systems
- Access to international markets
- Access to scarce financial resources or personell
What are the timing advantages?
- Fast and efficient development and commercialization of innovations
- Fast reaction to changes in market and technological environment
- Reduction of the amortization (paying off debt) period of the invested capital
What are the know-how advantages?
- Advantages of specialization by concentrating on core competencies
- Mutual know-how transfer
- Constructing vertical networks with specialized suppliers
What are the cost advantages?
- Reducing high investment in R&D by joint development projects
- Benefiting from learningcurve effects by focused production
- Reducing costs in corporate procurement (act of finding..) and distribution
What are the challenges and problems of cooperations?
- Planned synergies are not achieved
- Incompatible cultures hamper cooperation and communication
- Power struggle between two firms' top management
- Leakage of knowledge to cooperation partners
- Opportunistic behaviour
Give an example of a failed cooperation
Nokia and Siemens Communications - data networking and telecommunications equipment company
They were not able to sell the controlling stake, several attempts to restructure eterprise failed
Reason: Siemens struggled to monitize (convert into source of income) its telecommunication and mobile business already before the partnership and were only driven by financial interests. Nokia were bound by problems in the core mobile phone market. Both companies were liming giants in the respective market and could not bring value to each other.
In project-based cooperation, what types of cooperation models do we have?
- Prime contractor
What is a consortium?
It is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal - Organizations cooperate with competitors to achieve a common goal.