Cooperation strategy
Strategic Management
Cooperation Strategies
Definition :
The overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals.
Cooperation Strategies
Cooperation Strategies contains of 3 aspects :
1. Joint Venture / Partnering
2. Merger / Acquisition
3. Strategic Alliance
Cooperation Strategies
Definition :
Is a popular strategy that occurs when two or more companies form a temporary partnership for the purpose of capitalizing on some opportunity.
Joint Venture / Partnering
Advantages :
1. Risk sharing
Reduces investment cost of entering risky new area
2. Knowledge acquisition — learning experience for both partners
Shared technology
Shared managerial skills in organization, planning, and control 3. Entry into new, expanded, foreign markets
Reduces risk
Foreign country may require joint venture with local partner Joint Venture / Partnering
4. Financing — to raise capital
Share investment expense
Small company has product idea but no cash
Joint venture with large company that has cash to develop product
5. Distribution/marketing
To obtain distribution channels
To obtain raw materials supply
Joint Venture / Partnering
Common problems that cause joint ventures to fail are as follows:
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.
Joint Venture / Partnering
Merger
: Combination of two or more business enterprises into a single enterprise.
A merger occurs when two organizations of about equal size unite to form one enterprise.
Acquisition
:
Cooperation Strategies
Definition :
The overall scope and direction of a corporation and the way in which its various business operations work together to achieve particular goals.
Cooperation Strategies
Cooperation Strategies contains of 3 aspects :
1. Joint Venture / Partnering
2. Merger / Acquisition
3. Strategic Alliance
Cooperation Strategies
Definition :
Is a popular strategy that occurs when two or more companies form a temporary partnership for the purpose of capitalizing on some opportunity.
Joint Venture / Partnering
Advantages :
1. Risk sharing
Reduces investment cost of entering risky new area
2. Knowledge acquisition — learning experience for both partners
Shared technology
Shared managerial skills in organization, planning, and control 3. Entry into new, expanded, foreign markets
Reduces risk
Foreign country may require joint venture with local partner Joint Venture / Partnering
4. Financing — to raise capital
Share investment expense
Small company has product idea but no cash
Joint venture with large company that has cash to develop product
5. Distribution/marketing
To obtain distribution channels
To obtain raw materials supply
Joint Venture / Partnering
Common problems that cause joint ventures to fail are as follows:
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.
Joint Venture / Partnering
Merger
: Combination of two or more business enterprises into a single enterprise.
A merger occurs when two organizations of about equal size unite to form one enterprise.
Acquisition
: