Week 7 Flashcards
Strategic alliances:
collaborative agreements between 2 or more organisations that are voluntary and have a goal to achieve a specific business purpose. Enable to share knowledge and collaborate.
Allows to access VRIN resources without owning them.
Resource-based view:
Firms can create a competitive advantage which is based on their resources which should be valuable, rare, inimitable, and non-substitutable.
Typical resources:
1) Innovative culture
2) knowledge of R&D
3) distribution channels
4) good relationships with suppliers.
Reasons to form strategic alliances:
1) Exploiting complementaries
2) Accessing outside ideas and knowledge
3) Learning from alliance partners
Exploiting complementaries:
A company’s resources can become more valuable if they are combined with the resources of another company. Companies employing this alliance can easily but temporarily expand their resource base by including new and complementary resources.
Accessing outside knowledge and ideas:
Companies often struggle when new tech or business model requires them to revise the way they create value.
By accessing outside knowledge and ideas, the company gets new perspectives on reconfiguring resources in a different way to be able to respond to external developments.
Learning from alliance partners:
Knowledge consists of:
Information - knowledge that is easily codifiable and can be transmitted without loss.
Know-how - knowledge that is tacit, complex, “sticky”, and difficult to codify.
Companies with alliances may be able to even transfer know-how which is normally difficult, and by doing so, gain strategic advantages. With alliances, they gain relationship-specific assets that lead to observation, understanding, and learning of each other’s know-how.
Relationship-specific assets:
Type of assets which are valuable in a specific relationship context. These assets are difficult to imitate and substitute.
Three main types: partner-specific absorptive capacity, knowledge-sharing routines, and trust.
Partner-specific absorptive capacity:
Absorptive capacity - ability to find valuable external knowledge, and utilise it.
Partner-specific absorptive capacity - ability to learn, understand, and evaluate the knowledge of a specific partner. Develops in an informal way, takes time.
Knowledge-sharing routine:
A pattern of interactions between firms that enable the transfer, combination, or creation of specialized knowledge.
Exchange programs, cross-functional teams, joint training programs, and joint R&D.
Trust:
Partners must trust each other to gain the best competitive advantage and make their relationships work. It serves as an assurance that the partner will not engage in opportunistic behavior and abuse access to know-how.
Partner Complementarity:
The resources of partner companies (especially knowledge-based) should be:
Similar enough so that partners can make sense of each other’s resources and the value
Different enough so that partners can create unique resource combinations and valuable learning opportunities.
Partner compatibility:
Focuses on how compatible are the partner firms in decision-making, interactions with each other, and their ways of working.
The organization structure can be fluid or hierarchical, interaction can be formal/informal, and firm decision-making can be slow or fast. If there is differences, there can be frustration and limitations.
