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Chapter 6: Supplementing the
Chosen Competitive Strategy: Other
Important Business Strategy Choices
Screen graphics created by: Jana F. Kuzmicki, Ph.D. Troy University
McGrawHill/Irwin Copyright © 2010 by The McGrawHill Companies, Inc. All rights reserved.
Chapter Learning Objectives
1. Gain an understanding of how strategic alliances and collaborative partnerships can bolster a company’s competitive capabilities and resource strengths.
2. Become aware of the strategic benefits of mergers and acquisitions.
3. Understand when a company should consider using a vertical integration strategy to extend its operations to more stages of the overall industry value chain.
4. Understand the conditions that favor farming out certain value chain activities to vendors and strategic allies.
5. Recognize how and why different types of market situations shape business strategy choices.
6. Understand when being a first-mover or a fast-follower or a late-mover can lead to competitive advantage.
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Chapter Roadmap
Strategic Alliances and Partnerships Merger and Acquisition Strategies
Vertical Integration Strategies: Operating Across More Stages of the Industry Value Chain
Outsourcing Strategies: Narrowing the Boundaries of the Business
Business Strategy Choices for Specific Market Situations
Timing Strategic Moves – To be an Early Mover of a Late
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Strategic Alliances and Partnerships
Companies sometimes use strategic alliances or collaborative partnerships to complement their own strategic initiatives and strengthen their competitiveness. Such cooperative strategies go beyond normal company-to-company dealings but fall short of merger or full joint venture partnership.
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Characteristics of a Strategic Alliance
Strategic alliance – A formal agreement between two or more separate companies where there is
Strategically relevant collaboration of some sort Joint contribution of resources
Shared risk
Shared control
Mutual dependence Alliances often involve
Joint marketing
Joint sales or distribution Joint production
Design collaboration Joint research
Projects to jointly develop new technologies or products
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