Rob, Josh, Sade, Mike, Nichole, and Pete

Cooperative Strategy

Action plan a firm develops to form cooperative relationships with other firms
A relationship between firms in thich the parners agree to cooperate in ways that provide benefit to each firm

Strategic Alliance

Equity alliance

Each partner owns a percentage of the equity in a venture that the firms have jointly formed

Joint Venture
A separate business formed due to an equity alliance

Non-equity Alliance

A contractual relationship between two of more firmsin which eash partner agrees to share some of its resources or capabilities

Gain access to restricted markets Develop new goods or serves Facilitate new market entry Share significant R&D investment Develop market power Gain access to complementary resources Build economies of scale Meet competitive challenges Learn new skills and capabilities Outsource for lower costs and higher-quality output

Vertical Strategic Alliance

Alliance that involves cooperative partnerships across the value chain Often used to produce products Necessary to control their supply chain

Horizontal Strategic Alliances

Alliance that involves cooperative partnerships in which firms at the same stage of the value chain share resources and capabilities Often formed to respond to competitors actions or reduce competition Can be a form of collusion (explicit or tacit)

Diversification by alliance

R&D strategic alliance formed with the intent to develop new products that6 serve markets distinct from those that the partners currently serve. Partners share resources or integrate complementary capabilities to create economies of scope

Synergy by Alliance

Franchising
Licensing of a good or service and business model to partners for specified fees Fees include a signing fee and a percentage of the franchisee's revenues or profits

International Strategic Alliances

Most prominent means of entering foreign markets Useful for learning about other cultures Many risks involved

Managing Risks in Strategic Alliances

Strategic alliances often fail Developing trust is a major issue Corporate and cultural differences

Managing Strategic Alliances

Becoming a division of many corporations Selecting the right partners Accessing the resources desired from the other partner and sharing of knowledge Attention to equity investments Taking advantage of opportunities vs. minimizing cost

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With Dow and Monsanto being competitors, does this present any concerns within their alliance? Based on the case information, is there any evidence that a joint venture, equity alliance, or nonequity alliance is in existence? What value are customers likely to receive from the Dow/Monsanto alliance? Using the Internet, what additional information can we gain about the status of the failed DanoneWahaha joint venture and how the failed venture was managed in its disengagement process?