Description
A Cooperative Strategy for 21st Century Seapower is the United States' newest maritime strategy.[1] It was presented by the U.S. Chief of Naval Operations and the Commandants of the U.S. Marine Corps and U.S. Coast Guard at the International Seapower Symposium at the U.S. Naval War College in Newport, Rhode Island on October 17, 2007.[2] The new maritime strategy explains the comprehensive role of the sea services in an era marked by globalization and uncertainty.
Cooperative Strategy
Ch9-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch9-2
Strategic Alliances Partnerships between firms
where their Resources
Firm A
Firm B
Capabilities are combined to pursue mutual interests to Core Competencies
Develop
Goods Manufacture Distribute
Services
Ch9-3
Types of Strategic Alliances
Joint Venture
Independent firm is created by the joining assets from two other firms where each contributes 50% of the total Example: Dow Corning from Dow Chemical and Corning Inc.
Equity Strategic Alliance
Partnership where the two partners do not own equal shares Example: Chrysler and Mitsubishi Automotive
Non-Equity Strategic Alliance
Contract is given to supply, produce or distribute a firm’s goods or services (without equity sharing) Example: Chrysler’s supplier network
Ch9-4
Reasons for Alliances by Market Type
Slow Cycle Market
Gain access to a restricted market Establish franchise in a new market Maintain market stability Gain market power Gain access to complementary resources Overcome trade barriers Meet competitive challenge Pool resources for large projects Learn new business techniques Increase speed of product, service or market entry Maintain market leadership Form an industry technology standard Share risky R&D expenses Overcome uncertainty
Standard Cycle Market
Fast Cycle Market
Ch9-5
Types of Strategic Alliances
Complementary Alliances BusinessLevel Competition Reduction Alliances Competition Response Alliances Uncertainty Reduction Alliances
Diversification Alliances
CorporateLevel Synergistic Alliances Franchising
Ch9-6
Types of Business-Level Strategic Alliances
Complementary Strategic Alliances
Supplier Value Chain
Partnerships that build on the complementarities among firms that make each more competitive
Buyer Value Chain
Vertical Alliance
Include distribution, supplier or outsourcing alliances where firms rely on upstream or downstream partners to build competitive advantage
Example: Japanese manufacturers rely on close relationships among suppliers to implement Just-In-Time inventory systems
Ch9-7
Types of Business-Level Strategic Alliances
Complementary Strategic Alliances
Used to increase the strategic competitiveness of the partners
Supplier Value Chain Buyer Value Chain
Horizontal Alliance
Example: Product development agreements between Microsoft and Dreamworks SKG or Joint ventures between BMG Entertainment and Universal Music Ch9-8
Types of Business-Level Strategic Alliances
Competition Reduction Strategies
Avoiding competition by using tacit collusion such as price fixing Example: OPEC petroleum cartel
Competition Response Strategies
Firms join forces to respond to a strategic action of another competitor Example: DirecTV has agreement with Time Warner for exclusive programming
Uncertainty Reduction Strategies
Alliances can be used to hedge against risk and uncertainty Example: ATT acquires Teleport, a provider of telecommunications services to business customers
Ch9-9
Types of Corporate-Level Strategic Alliances
Diversifying Alliances
Allows a firm to expand into a new product or market area with an acquisition Example: Samsung Group joins with Nissan to build new autos
Synergistic Strategic Alliances
Create economies of scope between two or more firms, creating synergy across multiple businesses between firms
Example: Sony shares development with many small firms
Franchising
Allows firms to grow and relatively strong centralized control without significant capital investments Example: McDonald’s or Century 21
Ch9-10
International Cooperative Strategies
Allows risk sharing by reducing financial investment Host partner knows local market and customs
However....
International alliances can be difficult to manage due to differences in management styles, cultures or regulatory constraints Must gauge partner’s strategic intent so they do not gain access to important technology and become a competitor
Ch9-11
Network Strategies
Network strategies involve a group of interrelated firms that work for the common good of all
Example: Japanese keiretsus or U.S. R&D consortia
Stable Networks
The three types of networks:
Dynamic Networks Internal Networks
Ch9-12
Network Strategies
Stable network
Long term relationships that often appear in mature industries with largely predictable market cycles Example: NIKE’s relationships with suppliers and distributors
Dynamic network
Arrangements that evolve in industries with rapid technological change leading to short product life cycles
Example: Apple computer and Sharp electronics
Internal network
Management system used to coordinate a global web of suppliers and customers Example: Asea Brown Boveri’s network
Ch9-13
Competitive Risks with Cooperative Strategies
While cooperative systems can offer many advantages, there are also significant risks associated with them Poor contract development Misrepresentation of partners’ competencies Failure of partners to make complementary resources available
Being held hostage through specific investments made with partner
Misunderstanding a partner’s strategic intent
Ch9-14
Managing Risks in Cooperative Strategies
Competitive Risks * Inadequate
contracts
Risk and Asset Management Approaches * Detailed
contracts and monitoring
Outcome
Value Creation
* Misrepresentation
of competencies complementary resources
* Partner fails to use
* Developing
trusting relationships
* Holding alliance
partner’s specific investments hostage
Ch9-15
doc_994813696.ppt
A Cooperative Strategy for 21st Century Seapower is the United States' newest maritime strategy.[1] It was presented by the U.S. Chief of Naval Operations and the Commandants of the U.S. Marine Corps and U.S. Coast Guard at the International Seapower Symposium at the U.S. Naval War College in Newport, Rhode Island on October 17, 2007.[2] The new maritime strategy explains the comprehensive role of the sea services in an era marked by globalization and uncertainty.
Cooperative Strategy
Ch9-1
Strategic Inputs
Chapter 2 External Environment Strategic Intent Chapter 3 Internal Environment Strategic Mission
The Strategic Management Process
Strategy Implementation
Chapter 10 Corporate Governance
Chapter 12 Strategic Leadership Chapter 11 Structure & Control Chapter 13
Entrepreneurship
Strategy Formulation
Chapter 4 Business-Level Strategy Chapter 5 Competitive Dynamics Chapter 8 International Strategy Chapter 6 Corporate-Level Strategy Chapter 9 Cooperative Strategies
Strategic Actions
Chapter 7 Acquisitions & Restructuring
& Innovation
Outcomes
Strategic
Feedback
Strategic Competitiveness Above Average Returns
Ch9-2
Strategic Alliances Partnerships between firms
where their Resources
Firm A
Firm B
Capabilities are combined to pursue mutual interests to Core Competencies
Develop
Goods Manufacture Distribute
Services
Ch9-3
Types of Strategic Alliances
Joint Venture
Independent firm is created by the joining assets from two other firms where each contributes 50% of the total Example: Dow Corning from Dow Chemical and Corning Inc.
Equity Strategic Alliance
Partnership where the two partners do not own equal shares Example: Chrysler and Mitsubishi Automotive
Non-Equity Strategic Alliance
Contract is given to supply, produce or distribute a firm’s goods or services (without equity sharing) Example: Chrysler’s supplier network
Ch9-4
Reasons for Alliances by Market Type
Slow Cycle Market
Gain access to a restricted market Establish franchise in a new market Maintain market stability Gain market power Gain access to complementary resources Overcome trade barriers Meet competitive challenge Pool resources for large projects Learn new business techniques Increase speed of product, service or market entry Maintain market leadership Form an industry technology standard Share risky R&D expenses Overcome uncertainty
Standard Cycle Market
Fast Cycle Market
Ch9-5
Types of Strategic Alliances
Complementary Alliances BusinessLevel Competition Reduction Alliances Competition Response Alliances Uncertainty Reduction Alliances
Diversification Alliances
CorporateLevel Synergistic Alliances Franchising
Ch9-6
Types of Business-Level Strategic Alliances
Complementary Strategic Alliances
Supplier Value Chain
Partnerships that build on the complementarities among firms that make each more competitive
Buyer Value Chain
Vertical Alliance
Include distribution, supplier or outsourcing alliances where firms rely on upstream or downstream partners to build competitive advantage
Example: Japanese manufacturers rely on close relationships among suppliers to implement Just-In-Time inventory systems
Ch9-7
Types of Business-Level Strategic Alliances
Complementary Strategic Alliances
Used to increase the strategic competitiveness of the partners
Supplier Value Chain Buyer Value Chain
Horizontal Alliance
Example: Product development agreements between Microsoft and Dreamworks SKG or Joint ventures between BMG Entertainment and Universal Music Ch9-8
Types of Business-Level Strategic Alliances
Competition Reduction Strategies
Avoiding competition by using tacit collusion such as price fixing Example: OPEC petroleum cartel
Competition Response Strategies
Firms join forces to respond to a strategic action of another competitor Example: DirecTV has agreement with Time Warner for exclusive programming
Uncertainty Reduction Strategies
Alliances can be used to hedge against risk and uncertainty Example: ATT acquires Teleport, a provider of telecommunications services to business customers
Ch9-9
Types of Corporate-Level Strategic Alliances
Diversifying Alliances
Allows a firm to expand into a new product or market area with an acquisition Example: Samsung Group joins with Nissan to build new autos
Synergistic Strategic Alliances
Create economies of scope between two or more firms, creating synergy across multiple businesses between firms
Example: Sony shares development with many small firms
Franchising
Allows firms to grow and relatively strong centralized control without significant capital investments Example: McDonald’s or Century 21
Ch9-10
International Cooperative Strategies
Allows risk sharing by reducing financial investment Host partner knows local market and customs
However....
International alliances can be difficult to manage due to differences in management styles, cultures or regulatory constraints Must gauge partner’s strategic intent so they do not gain access to important technology and become a competitor
Ch9-11
Network Strategies
Network strategies involve a group of interrelated firms that work for the common good of all
Example: Japanese keiretsus or U.S. R&D consortia
Stable Networks
The three types of networks:
Dynamic Networks Internal Networks
Ch9-12
Network Strategies
Stable network
Long term relationships that often appear in mature industries with largely predictable market cycles Example: NIKE’s relationships with suppliers and distributors
Dynamic network
Arrangements that evolve in industries with rapid technological change leading to short product life cycles
Example: Apple computer and Sharp electronics
Internal network
Management system used to coordinate a global web of suppliers and customers Example: Asea Brown Boveri’s network
Ch9-13
Competitive Risks with Cooperative Strategies
While cooperative systems can offer many advantages, there are also significant risks associated with them Poor contract development Misrepresentation of partners’ competencies Failure of partners to make complementary resources available
Being held hostage through specific investments made with partner
Misunderstanding a partner’s strategic intent
Ch9-14
Managing Risks in Cooperative Strategies
Competitive Risks * Inadequate
contracts
Risk and Asset Management Approaches * Detailed
contracts and monitoring
Outcome
Value Creation
* Misrepresentation
of competencies complementary resources
* Partner fails to use
* Developing
trusting relationships
* Holding alliance
partner’s specific investments hostage
Ch9-15
doc_994813696.ppt