Chapter 8 Strategic Alliances CHAPTER 8 STRATEGIC ALLIANCES

Chapter 8: Strategic Alliances

CHAPTER 8 STRATEGIC ALLIANCES

CREATE VALUE BY FOCUSING ON THE SYSTEM Strategic Partnership Value to Customer Traditional Relationship Value to Supplier

3 TYPES OF STRATEGIC ALLIANCES CONTRACTUAL ALLIANCE EQUITY ALLIANCE JOINT VENTURE Cooperation between firms is managed directly through contracts, without cross-equity holdings or an independent firm being created. Cooperative contracts are supplemented by equity investments by one partner in the other partner. Sometimes these equity investments are reciprocated. Cooperating firms combine resources to form an independent firm in which they invest. Profits from this independent firm compensate partners for this investment. . PREFFERED WHEN: • Interdependence between firms is • Interdependence between moderate (e. g. , sequential). very high (e. g. , reciprocal). partners is low (e. g. , pooled). • Firms bring knowledge • It is easy to measure the or difficult to measure or difficult-to-measure contributions of each partner and contributions but each can contributions that must write it in a contract. perform their roles separately. be combined into a single organization to coordinate effectively.

WAYS TO CREATE VALUE IN ALLIANCES 1 Combine Unique Resources 2 Pool Similar Resources 3 Create New Alliance-Specific Resources 4 Lower Transaction Costs (Build Trust)

COMBINE UNIQUE RESOURCES Disney-Oriental Land Co. Alliance Disney Resources & Capabilities OLC Resources & Capabilities Disney brand Disney theme park rides and designs Park management processes Ongoing stream of Disney characters from movies • Disney consumer products to sell at the park • Land for the park near Tokyo • Financial resources to build the park • Relationships with construction firms to build the park • Knowledge of Japanese culture and how to manage Japanese workers • •

CREATE NEW ALLIANCE-SPECIFIC RESOURCES Battery Gigafactory

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