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Lecture 7

GEO 334 Lecture Notes - Lecture 7: Joint Venture, Starbucks, Offshoring


Department
Geography
Course Code
GEO 334
Professor
michael lecky
Lecture
7

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Chapter 7- Implementing Strategy- Small Businesses, Global Alliances, Emerging Market
Firms
Strategic alliances (AKA COOPERATIVE STRATEGIES) are partnerships between two or
more firms combine financial, managerial, and technological resources and their distinctive
competitive advantages to pursue mutual goals
Alliancesoften called cooperative strategiesare transition mechanisms that propel the
partners’ strategies forward in a turbulent environment faster than would be possible for each
company alone.
Alliances typically fall under one of three categories: joint ventures, equity strategic alliances,
and non-equity strategic alliances, and they can be for various purposes such as sharing
technology, marketing, or production joint ventures.
Cross-border alliances frequently necessitate acquiring a local partner to counteract political risk
factors and to take advantage of local knowledge and contacts

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Joint venture (JV) is a new independent entity jointly created and owned by two or more parent
companies
An international joint venture (IJV) is a joint venture among companies in different countries.
The firm shares the profits, costs, and risks with a local partner (or a global partner) and benefits
from the local partner’s local contacts and markets.
Non-Equity Strategic Alliance
-UPS, for example, is a global supply-chain manager for many companies around the world,
such as Nike, that essentially do not touch their own products but contract with UPS to arrange
the entire delivery process from factory to warehouse to customer to repair, even collecting the
money
Global Strategic Alliances
Working partnerships between companies (often more than two) across national boundaries
and increasingly across industries are referred to as global strategic alliances
A glance at the global airline industry, for example, tells us that global alliances have become a
mainstay of competitive strategy
Motivation and Benefits behind Global and Cross-Border Alliances
-To avoid import barriers, licensing requirements, and other protectionist legislation:
Japanese automotive manufacturers, for example, use alliances such as the GMToyota
venture, or subsidiaries, to produce cars in the United States to avoid import quotas.
- To share the costs and risks of the research and development of new products and
processes:
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