Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

MGCR 423 > Cooperative Strategy > Flashcards

Cooperative Strategy Flashcards

1
Q

cooperative strategy

A

a strategy through which independent firms choose to

work together to achieve a shared objective.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

firms execute cooperative strategy by forming ____________

A

strategic alliances

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

strategic alliance

A

a cooperative strategy in which firms combine some of their resources and capabilities in attempt to create a competitive advantage

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What must happen for strategic alliances to be formed and continue?

A

must benefit every side involved

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

strategic alliances are __________ partnerships

A

mutually lucrative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

describe Spotify and Hulu’s diversifying alliance

A
  • corporate level, non-equity
  • Spotify wanted to match Apple
  • offers bundle with Hulu
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What would Spotify’s other options (other than partnering with Hulu)?

A
  • diversify organically into video

- acquire Hulu

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

reasons for Spotify to not acquire Hulu

A
  • Spotify isn’t profitable, is losing money (struggling financially)
  • -> maybe not have the capital
  • less commitment to be an alliance
  • ->if things don’t work out, can part ways easily
  • -> more risk with acquisition
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Reasons to not diversify organically (for Spotify into video)

A
  • unpredictable costs
  • would take time to develop
  • don’t necessarily have the capabilities (hard to predict results)
  • just generally unpredictable over all
  • don’t have brand recognition in the space
  • don’t have industry knowledge, relationships with suppliers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is Spotify’s reasoning for partnering with Hulu?

A

looking for a quick way to compete with Apple and Amazon

also less financially challenging

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is Hulu’s reasoning for partnering with Spotify?

A
  • Spotify is a distribution channel for them
  • entered revenue sharing arrangement with Spotify
  • customer acquisition
  • -> can upsell them
  • Spotify has a large customer base
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

describe the synergistic alliance for Hulu with Sprint (and Spotify)

A
  • corporate level, non-equity
  • good for Sprint because Hulu is value added for customers
  • distribution + customer base for Hulu
  • alliances are temporary
  • -> when T-Mobile acquired Sprint, stopped with the alliance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Why should orgs engage in strategic alliances? (5)

A
  1. By forming alliances firms can gain access to resources and capabilities they don’t possess internally.
  2. Firms can enter multiple alliances with different partners for different purposes:
    creating a portfolio of ongoing alliances.
  3. Alliances don’t require a large investment like M&A, don’t have the same integration challenges and are not permanent.
  4. While some alliances last for a long time, most are short-lived and cease to exist as soon as participating firms no longer gain value from the alliance.
  5. For firms to enter into an alliance, it must be lucrative for all sides.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

joint venture

A
  • a legally independent company created by two or more firms

* Have partners who own equal percentages and contribute equally to the venture’s operations

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

equity alliance

A
  • a legally independent company formed by firms who own different percentages of a company
  • a greater (controlling) equity stake is owned by a partner who contributes more resources and capabilities to the alliance
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

non-equity alliance

A
  • A contractual agreement, no separate legal entity is formed
  • Licensing agreements, distribution agreements, supply contracts, outsourcing agreements
17
Q

describe Apple and IBM’s complementary alliance

A
  • business-level, horizontal, joint venture
  • wanted to create an operating system (IBM wanted to replace Windows, Apple wanted to replace their own)–> joint-venture

Before

  • Apple used a closed-system, but it’s operating system wasn’t as good as others
  • -> and had to spend lots on R&D for only a small market share
  • ->nobody wanted to develop for it
  • IBM was industry standard
  • ->software develops wanted to develop for IBM, since they had the market share
  • problem for IBM was that Microsoft became too powerful of a supplier that it was eating up profits

Alliance

  • two competitors worked together (challenging because they may not want to share knowledge)
  • –> horizontal because they are within the same industry
  • joint venture failed
  • –> no results, just sunk cost
  • then Apple entered into alliance with Intel
  • -> Intel was industry expectation
  • ->business level, vertical, non-equity
  • -> Apple converted to run on Intel chips (eventually didn’t work and went back to in-house)
18
Q

describe the alliance between Microsoft Bing and Yahoo

A
  • horizontal, non-equity
  • Microsoft tried to acquire Yahoo, was denied by anti-trust authorities, so formed alliance instead
  • Created Yahoo! powered by Bing
  • alliance as an alternative to acquisition
19
Q

describe alliance between Starbucks and Oatly

A
  • vertical, non-equity
  • integrated a bit more permanently
  • might want this partnership because more and more consumers looking for milk alternatives
  • helps Starbucks brand image
  • Starbucks is huge distribution channel for Oatly
  • -> can sell so much more
  • alliances can serve as testing ground for acquistion
20
Q

describe walmart and mcdonalds’ synergistic alliance

A
  • corporate, non-equity
  • maxmize sales by taking advantage of each other’s foot traffic
  • have same customer base
21
Q

describe franchising through the lens of McDonald’s

A
  • strategy as a way to expand
  • an alliance between franchisor (McD) and franchisee (entrepreneur)
  • advantages for entrepreneur:
  • ->brand name, revenue, gets a proven concept
  • -> national advertising benefits
  • -> doesn’t do R&D
  • –> have to make few decisions, everything decided at corporate level
  • -> less risky
  • advantage for franchisor
  • -> can avoid some start-up costs (franchisee pays license fee)
  • ->make money from sales of raw materials
  • ->royalty fee –> 4-5% of sales
  • ->don’t have to invest with own money (financial risk is with franchisee)
22
Q

what is a risk of franchising

A

some reputation risk

–> some quality control issues could arise

23
Q

describe IKEA’s franchising

A
  • Ingka prefers to own stores in western countries
  • uses franchising in some markets that have specifics
  • mixed strategy
24
Q

describe Eli Lilly and Ranbaxy’s cross-border joint venture

A
  • US pharmaceutical company (Eli Lilly) and Indian pharmaceutical company (Ranbaxy)
  • Eli Lilly gets opportunity to get established in the Indian market, take advantage of cheap labour
  • Ranbaxy who mostly did reverse engineering to develop products, got the opportunity to learn from a world class innovator, prep for world expansion
  • Eli Lilly also restricted by gov, not allowed FDI above 51%
  • –> could not acquire Ranbaxy
  • venture very successful initially
  • -> after 6 years, Eli Lilly felt they didn’t need Ranbaxy (had knowledge of markets and connections), Ranbaxy felt the same –> just needed cash for world expansion
  • Ranbaxy willing to sell share, Eli Lilly bought it
25
Q

describe the general airline partnerships

A
  • business level, horizontal, joint venture (contract)
  • -> share revenue and costs on shared routes

Generate sales:
-Provide more route options to customers
-Customers’ frequent flyer programs work across partnering airlines
Manage costs:
-Share costs on common routes
Overall benefit: maximize sales and share costs in a competitive industry

26
Q

describe alliance between Cirque du Soleil and MGM Mirage

A
  • synergistic alliance, non-equity
  • Cirque needed venue to maximize ticket sales
  • MGM needed entertainment to draw customers to the hotel
  • MGM would build the stage
  • ticket sales divided half and half
  • cirque could be stationary
  • -> can take advantage of huge rotation of tourists
27
Q

What should you do when evaluating alliances as a strategic option? (6)

A

▪ Think what strategic objectives can be achieved through an alliance
▪ Evaluate a target partner to fit objectives (partner’s resources, capabilities, trustworthiness)
▪ Estimate value (synergies) that can be created by working together in an alliance
▪ Make sure to understand benefits for each partner involved
▪ Considering the temporary, non-committal nature of most alliances, evaluate the risks: intellectual property leakage, partners acting in an opportunistic way, misrepresentation of resources and capabilities
▪ Remember the role of the human factor in making alliances succeed: partnerships are formed among human leaders where personalities, values and visions matter

MGCR 423 (20 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions