Welcome to Week 14!
Entrepreneurship: Chapter 9
Ashton Converse
Investor Presentations and Cooperative Strategy
Objectives/Schedule
 Welcome
 Investor Presentations
 Review
 Managing Cooperative Strategies
 Chapter 9 and a Deeper look into strategic
managing of corporations and businesses
 Bring Me Hope: Joy for a Child
 Have a great weekend! Hope it snows again!
Reminder about Presentations
I will be grading you on the following things:
1. Did you say all of your names and the company
2.
3.
4.
5.
6.
name
Did you introduce the company
Did you all speak
Did you speak clearly
Did you make a PPT
Is your presentation neat and organized
7. Did you discuss all the areas of the PPT and share
why people should invest in your company?
8. Is it under or exactly 10 minutes long.
9. Do you have professional goals for the next 5 years
10. Did you listen to other groups presentations.
Review!!!
 What is international diversification?
 What does exporting mean?
 What are the 3 International Corporate
Strategies?
 What are 3 of the 4 benefits of International
Strategy?
 Name several problems managers may have in
managing a multinational business?
Opening Thoughtful Question
 Why is it good to cooperate with others when
making a large decision?
 For instance, why do you sometimes ask your
friends or parents about a decision before you
decide on your final answer?
 It is good to use each others knowledge and
resources
 It is productive to see things through other peoples
perspective (eyes, view)
Cooperative Strategy
To work together with others to accomplish a goal is
what some companies due to jump ahead of the
competition
 In the beginning case reading, we saw IBM is a large
part of many companies
 And they work with other companies to help their
goals too.
Cooperative Strategy:
 A strategy in which firms work together to achieve a
shared or common objective
Deeper Knowledge in
Cooperating
 What is a strategic alliance (remember)?
 Cooperative strategy in which firms combine some of
their resources and capabilities
 Desire to work together to create a competitive
advantage: (3 Types)
New Term: Joint Venture
 Type of strategic alliance, where two or more companies
create a legally independent company
 These companies share some of their resources and
capabilities to then develop an advantage
 Creates good relationships and helps share knowledge
Other Types of Strategic
Alliances
 Equity Strategic Alliance
 Two or more firms own different percentages of the
company they have formed
 Did so by combining some of their resources and
capabilities to create a competitive advantage
 Nonequity Strategic Alliance
 Two or more firms develop a contractual relationship to
share some of their resources and capabilities for a
competitive advantage
 Will not establish a company, so no equity positions or
long-term partnerships
Reasons for Strategic Alliances:
Market Type: Table 9.1
In Slow-Cycle Markets:
 Use strategic alliance to enter restricted markets
 Establish a franchise in a new market
 Maintain market stability
In Fast-Cycle Markets:





Speed up the development of new goods or services
Speed up new market entry
Maintain market leadership
Form an industry technology standard
Share risky expenses
Reasons for Strategic Alliances:
Market Type: Table 9.1
Standard-Cycle
 Gain market power
 Pool resources together and meet competitive
challenges
 Learn about new business techniques
Business Level Cooperative
Strategy
 Used to grow and improve a firms performance in
individual product markets
 What a firm plans on doing to gain a competitive
advantage
 The 4 Business Level Cooperative Strategies
include:
1. Complimentary Strategic Alliances
2. Competition Response Strategy
3. Uncertainty-reducing strategy
4. Competition-reducing strategy
Corporate-Level Cooperative
Strategy
Helps a firm to diversify in terms of products
offered, or markets served, or both.
 Use diversifying alliances and synergistic alliances
to grow and improve performance by diversifying
their operations through means other than a merger
or acquisition.
Diversifying Strategic Alliance
 Strategy in which firms share some of their
resources and capabilities to diversify into new
product or market areas
Corporate-Level Cooperative
Strategies Continued
Three Main Types of Cooperative Strategies:
1. Diversifying Alliances (just discussed)
2. Synergistic Alliances
3. Franchising Alliances
Synergistic and Franchising
Synergistic Strategic Alliance:
 Strategy in which firms share some of their resources and
capabilities to create economies of scale. Any Examples?
 Creates synergy across multiple functions or businesses.
Franchising
 Strategy in which a firm uses a franchise as a contractual
relationship to describe and control the sharing of its
resources and capabilities with partners
 Very popular and growing, shown to help developing
countries (economy)
Assessing Strategies
Costs Come From Each Strategy:
 Corporate Strategies are usually more complex,
and usually more costly
Success is still possible:
 With costs, success and future knowledge can still
be found
Final Question for Deciding:
 IS the benefit more than the cost?
Concluding Terms
Cross-Border Strategic Alliance
 An international cooperative strategy in which firms
with headquarters in different nations decide to
combine some of their resources and capabilities to
create a competitive advantage
Network Cooperative Strategy
 Cooperative strategy wherein several firms agree to
form multiple partnerships to achieve shared
objectives
 Increasing as firms are looking for the best ways to
create value
RISKS and Management
Problems
Competitive Risks: What are some risks?
 Inadequate contracts
 Misrepresentation of Goals
 Partner firms fail to use resources
 Partner keeps resources too long
 Costs of sharing resources
 Abuse of information or resources
Overcoming Risks and Goals
 Managers Need to Be Sure of the Following:
 The contracts are detailed and monitored
 The trust between the firms is developed
 All workers understand the policies and trust
between the relationship
 Primary Goal of Cooperative Strategies
 CREATE VALUE!
 At the least for your firm
 Maybe other partnership firms