- In general, the choice will depend on the circumstances confronting the firm. If the firm is seeking to enter a market where there are already well-established incumbent enterprises, and where global competitors are also interested in establishing a presence, it may pay the firm to enter via an acquisition. Show - if the firm is going to make an acquisition, its management should be cognizant of the risks associated with acquisitions that were discussed earlier and consider these when determining which firms to purchase. It may be better to enter by the slower route of a greenfield venture than to make a bad acquisition. - If the firm is considering entering a country where there are no incumbent competitors to be acquired, then a greenfield venture may be the only mode. Even when incumbents exist, if the competitive advantage of the firm is based on the transfer of organizationally embedded competencies, skills, routines, and culture, it may still be preferable to enter via a greenfield venture. - Partner selection: A good ally, or partner, has three characteristics. First, a good partner helps the firm achieve its strategic goals, whether they are market access, sharing the costs and risks of product development, or gaining access to critical core competencies. The partner must have capabilities that the firm lacks and that it values. Second, a good partner shares the firm's vision for the purpose of the alliance. If two firms approach an alliance with radically different agendas, the chances are great that the relationship will not be harmonious, will not flourish, and will end in divorce. Third, a good partner is unlikely to try to opportunistically exploit the alliance for its own ends, that is, to expropriate the firm's technological know-how while giving away little in return - Alliance structure: - Managing the alliance: Upgrade to remove ads Only ₩37,125/year
Terms in this set (44)strategic alliance business arrangement whereby two or more firms choose to cooperate for their mutual benefit joint venture (defined) type of strategic alliance in which two or more firms join together to create a new business entity that is legally separate and distinct from its parents, established as corporations. 3 Methods of Joint Venture Management 1) Founding firms may jointly share management, each appointing key personnel who report back to officers of the parent. Benefits of Strategic Alliances Ease of Market Entry Scope of Strategic Alliances Comprehensive Alliances Comprehensive Alliance - arises when participating firms agree to perform together multiple stages of the process by which goods or services are brought to the market Functional Alliance - involves a single functional area of business Types of Functional Alliances R&D Production Alliance functional alliance in which two or more firms each manufacture products or provide services in a shared or common facility Marketing Alliance functional alliance in which two or more firms share marketing services or expertise Financial Alliance functional alliance of firms that want to reduce the financial risks associated with a project R&D Alliance partners agree to undertake joint research to develop new products or services R&D (Research) consortium This type of alliance is usually in the high technology fields where the companies band together to research and develop new products and processes with the assistance of government funding R&D Consortium (defined) a confederation of organizations that band together to research and develop new products and processes for world markets This type of strategy alliance must have its own set of managers and board of directors to allow it a broader purpose, scope, and duration. joint venture Implementation of Strategic Alliances Selection of Partners What are factors MNCs must consider when choosing a partner MNC? Compatibility Forms of Ownership public-private venture When an MNC considers forming an alliance with another MNC, which of the following was not mentioned as one of the three most critical issues they will face in deciding how to manage the new business? learning potential of an alliance Selection of Partners Compatibility public-private venture (defined) involves a partnership between a privately owned firm and government What type of venture did Gulf Canada and the government of the Ivory Coast enter into when they combined to explore and develop prospective oil fields in its coastal waters? public-private venture Joint Management Considerations Shared-Management agreement In this type of strategic alliance, the partners agree not to get involved in ongoing operations and so delegate management control to the executives of the joint venture itself. delegated arrangement Which of the following are the three arrangements that may be used to jointly managing a strategic alliance? Shared-Management agreement Shared-Management Agreement each partner fully and actively participates in managing the
alliance Assigned Arrangement one partner assumes primary responsibility for operations of the strategic alliance
Delegated Arrangement reserved for JVs, the partners agree not to get involved in ongoing operations and so delegate management control to the executives of the JV itself Pitfalls of Strategic Alliances incompatibility of partners Which of the following is the primary pitfall MNC partners experience in a strategic alliance? incompatibility Research suggests that strategic alliances are more likely to succeed if the skills and resources of the partners are similar. False A strategy alliance is an agreement between two firms to cooperate on a venture for their mutual benefit. True Most comprehensive alliances are formed as non-joint ventures. False The agreement venture involving Kodak, Fuji, Canon, Minolta, and Nikon for the new type of film was an example of a successful joint venture. False Governmental support plays a major role in the formation of R&D consortiums. True By signing a joint-license agreement, all the MNCs involved in an R&D alliance will be able to use what is developed in the new business. False Economies of scope and scale in marketing and distribution confer benefits for firms that aggressively and quickly enter numerous markets. True Non-joint ventures are generally mores stable and last longer than a joint venture. False A joint venture usually takes the form of a corporation that is incorporated in one of the partners' home countries. False In a limited partnership arrangement, the managing partner assumes full financial responsibility for the venture, regardless of the amount of its own investment True R & D alliances are usually formed as joint ventures False Functional alliances occur when the MNCs agree to work together on many of the stages of the process to bring the goods or services to market. False Because joint ventures are not considered separate legal entities, they generally last longer than non-joint ventures. False The cross-licensing of proprietary technology is an example of a strategy alliance. True Students also viewedEconomics of strategy Ch.430 terms jonas_gutierrez46 International Business Chapter 1363 terms SHabeck EC335 - Quiz no. 1110 terms vox-nihili Chapter 4 Quiz Questions10 terms sarastiver Sets found in the same folderChapter 1481 terms livielizardPlus Chapter 1537 terms livielizardPlus Final Exam - Comprehensive Section41 terms livielizardPlus Final Exam - Chapter 12-1545 terms livielizardPlus
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Information Technology Project Management: Providing Measurable Organizational Value5th EditionJack T. Marchewka 346 solutions Information Technology Project Management: Providing Measurable Organizational Value5th EditionJack T. Marchewka 346 solutions Other Quizlet setsAnatomy Exam Review 2nd Tri58 terms JackParkerSL Chapter 1 - Networking Concepts (first 20 question…20 terms kyleacam Form B18 terms parkerallisonn Somatosensory System22 terms danrose20Plus What is the key difference between a joint venture and a strategic alliance?With a joint venture, two or more companies create a single legal entity in which each owns a share. By contrast, with a strategic alliance, each company works together but no new legal entity is created.
What is the difference between a joint venture and strategic alliance quizlet?What is the main difference between a strategic alliance and a joint venture? A strategic alliance involves non-equity arrangements, meaning that strategic alliances do not involve the creation of a separate entity with joint ownership. You just studied 4 terms!
What is the difference between a strategic alliance and a partnership?Two common forms of collaboration are alliances and partnerships. An alliance is a collaboration between individual companies for mutual profit, while a partnership is a merging of individual interests for mutual profit.
What is the difference between a strategic alliance and an acquisition?Both acquisitions and alliances are often used strategies for external growth. Where an acquisition involves taking control over another company through obtaining shares or properties, an alliance comprises companies that cooperate to pursue shared goals while remaining legally independent.
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What is the key difference between a joint venture and a strategic alliance quizlet?
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