Global Strategic Alliances 2
International
Business
Environments & Operations
DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-1
COLLABORATIVE
STRATEGIES
(GLOBAL STRATEGIC
ALLIANCES)
DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-2
Introduction
• Companies choose an international operating mode to achieve their objectives • When exporting and importing is not possible, firms must explore other options DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-3
Introduction
Factors Affecting Operating Modes in International Business
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-4
Introduction
Foreign Expansion: Alternative Operating Modes
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-5
Non-Collaborative Foreign Equity
Arrangements
• Why do firms want control?
• Internalization
• choose the lower cost between conducting operations internally and contracting to another party
• it may be cheaper to handle operations internally
• Appropriability
• do not transfer vital resources to another company to avoid having competitive position undermined
• Freedom to pursue a global strategy
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-6
Non-Collaborative Foreign Equity
Arrangements
• There are two ways to invest in a foreign country
• Acquisition of existing facilities
• Greenfield Investment – Building new facilities Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-7
Collaborative Arrangement via Global
Strategic Alliances
cross-border alliances and
partnerships between two or more firms from different countries who pursue mutual interests through resource and capability sharing.
Dr. Noryati Ahmad
8
Types of GSA
Equity Joint Ventures (EJV) form legally and
economically separate organizations,
created by two or more parent organizations that invest financial and other resources (like land, facilities, equipment, materials, intellectual property, or labor).
These can be 50/50 or any other percentages of ownership
Dr. Noryati Ahmad
9
Business
Environments & Operations
DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-1
COLLABORATIVE
STRATEGIES
(GLOBAL STRATEGIC
ALLIANCES)
DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-2
Introduction
• Companies choose an international operating mode to achieve their objectives • When exporting and importing is not possible, firms must explore other options DNA_2015
Copyright © 2015 Pearson Education Ltd.
15-3
Introduction
Factors Affecting Operating Modes in International Business
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-4
Introduction
Foreign Expansion: Alternative Operating Modes
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-5
Non-Collaborative Foreign Equity
Arrangements
• Why do firms want control?
• Internalization
• choose the lower cost between conducting operations internally and contracting to another party
• it may be cheaper to handle operations internally
• Appropriability
• do not transfer vital resources to another company to avoid having competitive position undermined
• Freedom to pursue a global strategy
Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-6
Non-Collaborative Foreign Equity
Arrangements
• There are two ways to invest in a foreign country
• Acquisition of existing facilities
• Greenfield Investment – Building new facilities Copyright © 2015 Pearson Education Ltd.
DNA_2015
15-7
Collaborative Arrangement via Global
Strategic Alliances
cross-border alliances and
partnerships between two or more firms from different countries who pursue mutual interests through resource and capability sharing.
Dr. Noryati Ahmad
8
Types of GSA
Equity Joint Ventures (EJV) form legally and
economically separate organizations,
created by two or more parent organizations that invest financial and other resources (like land, facilities, equipment, materials, intellectual property, or labor).
These can be 50/50 or any other percentages of ownership
Dr. Noryati Ahmad
9