CANS 406 Lecture Notes - Lecture 14: Strategic Alliance, Openai, Joint Venture
22 May 2018
School
Department
Course
Professor
Thursday, March 15th 2018
Cooperative strategies
Ends
• Business level strategy: cooperate
• Corporate level: diversification
• Diversification: horizontal, vertical
Means
• Mergers and acquisitions
• Alliances
Cooperative strategy
• Strategy in which firms work together to achieve a shared objective
• Cooperating with other firms is a strategy that
o Creates value for a customer
o Exceeds the cost of constructing customer value in other ways
o Establishes a favorable position relative to competitors
Strategic alliance
• Primary type of cooperative strategy
• Firms combine some of their resources and capabilities to create a mutual competitive advantage
o Involves the exchange and sharing of resources and capabilities to co-develop or distribute
goods and services
o Requires cooperative behavior from all partners
find more resources at oneclass.com
find more resources at oneclass.com
• Examples
o Strategic alliance for artificial intelligence standards
• Google, Facebook, Amazon, IBM and Microsoft (2016)
▪ Excluding Apple and OpenAI
• Three types of strategic alliances
o Joint venture
• Two or more firms create a legally independent company by sharing some of their
resources and capabilities
o Equity strategic alliance
• Partners who own difference % of equity in a separate company they have formed
• Co-develop, co-organize the operations
o Non-euity stategic alliance licensing…
• Most common form
• Two or more firms develop a contractual relationship to share some of their unique
resources and capabilities
• Selection of mode for diversification
o 3B : build, borrow (alliances), buy (acquisition)
o
• Reasons for strategic alliances by market type
o Slow cycle: innovation is slow
• Use alliances to expand market scale, enter new market/restricted market
o Fast cycle
• Learn and develop new capabilities
find more resources at oneclass.com
find more resources at oneclass.com
