ATHENA WEEK 2 - 2 Flashcards
What are 4 reasons to go solo as a company?
- availability of capabilities: if you have all the needed capabilities, why collaborating?
- Protecting proprietary technologies: working with a partner might expose the company’s existing technologies
- controlling technology development and use: not sharing profits (PRAGMATIC REASONS) or cultural differences
- building and renewing capabilities: it challenges the firm to develop new skills, resources and market knowledge
Advantages of collaborating
- Obtain necessary skills/resources quickly
- Increasing flexibility because of rapid development
- Learning from partners
- resource and risk pooling
- building a coalition around a shared standard
5 types of collaborative arrangements
- strategic alliance
- joint venture
- licensing
- outsourcing
- collective research organization
5 types of collaborative arrangements: strategic alliance
a temporary relationship that can take many forms
advantage: rapidly adjust and scale up capabilities, flexibility
disadvantage: lack shared language, routines and coordination
capability complementation and capability transfer
Capability complementation: combing/pooling capabilities/resources but not TRANSFERRING these resources between each other
Capability transfer: exchange of capabilities in such manner that partners can INTERNALIZE the capabilities and use them INDEPENDENTLY
5 types of collaborative arrangements: Joint venture
partnership involving a significant equity stake by the partner which leads often to new business entity
5 types of collaborative arrangements: Licensing
contractual agreement whereby one organ/individual (licensee) obtains the right to use the technology of another organ (licensor)
advantage for licensee and licensor
licensor: enable the firms technology to penetrate a wider range of markets
licensee: less expensive and less risky
5 types of collaborative arrangements: outsourcing
if they do not possess the competencies
5 types of collaborative arrangements: outsourcing, CONTRACT MANUFACTURING
A specific type of outsourcing where a firm hires another company to manufacture its products.
What are two main advantages of contract manufacturing?
It allows a firm to benefit from greater economies of scale and faster response times, which helps reduce costs and improve flexibility.
What is a major downside of outsourcing through contract manufacturing?
The firm may not develop its own skills and resources
What is another risk of outsourcing or contract manufacturing?
It can lead to high transaction costs related to managing contracts, quality control, and communication.
5 types of collaborative arrangements: Collective research organizations
Multiple organizations have established cooperative research and development organizations.
what influences partner selection?
1.Relative size and strength
2.The complementarity of resources
3.Alignment of objectives
4.Similarities of values and culture
5.Strategic fit
All these points come down to 2 things
- Resource fit: degree to which potential partners have resources that can be integrated into a strategy that creates value
- Strategic fit: Degree to which parents have compatible objectives and styles
governance
act or process of exerting authority and/or control
3 types of governance mechanism
- alliance contracts: legally binding contractual arrangements, partners are FULLY AWARE OF THEIR RIGHTS AND OBLIGATIONS
- Equity ownership: EACH PARNER CONTRIBUTES CAPITAL AND OWNS A SPECIFIED RIGHT TO A %
- Relationship governance: SELF-ENFORCING NORMS based on GOODWILL, TRUST AND REPUTATION
