Read the summary and the most important questions on International Strategic Alliance

• Introduction to the theme

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• Is there a third option beyond make (in a firm) or buy (at the market)?

  Yes, there is a third category, called the 'hybrids'. These consist of (1) strategic alliances, (2) networks, (3) outsourcing and (4) sub-contracting

• What are the various motivations of firms to enter strategic alliances?

  (a) economies of scale, (b) entering new markets/faster entry in foreign markets, (C) acquisition of new skills, (d) circumvent foreign market barriers, (e) setting new standards for technology, (e) gaining competitive advantages, (f) dividing risks/sharing resources, (g) overcoming competition in a market and (h) setting new standard for technology.

• What alliances and where do there mode of governance fit?

  Alliancesare a hybrid modeofgovernancebetweenmarketsandhierarchies

• What is the definition of a strategic alliance?

  “Strategic alliances are links formed between two – or more – independent companies which choose to carry out a project or specific activity jointly by coordinating the necessary skills and resources rather than:
  
  •pursuing the project or activity on their own, taking on all the risks and confronting competition alone
  •merging their operations or acquiring and divesting entire business units.”

• Strategic alliances seem to fail a lot, why are they so hard to manage?

  - Multiple decision-making centers
  - No direct governance (outside firm's boundaries)
  - Constant bargaining
  - Clash of interests
  - Competition to gain a 'bigger share of the pie'
  - Races to learn

• Explain the Market-based view to create a sustained competitive advantage

  Market-basedview (Porter): Structure–Conduct–Performance–Paradigm
  Proposition: resources in an industryarehomogenousand mobile
  Strategic management: selectingattractivesectorsandproducts
  
  
  
  ›  Competitiveadvantageslie in favorable marketstructures: Gainingmarket power becomeskey
  
  ›  Genericcompetitivestrategies: Costleadership vs. differentiation

• Explain the Resource-based view (RBV) to gain a sustained competitive advantage

  Resource-basedview (Barney): Resources–Conduct–Performance–Paradigm
  Proposition: resources in an industryareheterogeneousand immobile
  Strategic management: creatinguniquecorecompetences
  
  
  
  •Firm-internal resources are the sources of competitive advantage.
  •Resource (bundles) need to be identified that are valuable, rare, inimitable, non-substitutable (VRIN).
  •Unique resources improve organizational performance.
  
  •Firms need to focus on their core competences and protect and develop these.

• When are resources strategic?

  
  ›Strategic resourcesare a sourceofsustainedcompetitiveadvantageiftheyare:
  •valuable, i.e. create added value for customers
  •rare, i.e. cannot easily be developed
  •inimitable, i.e. controlled by only one firm because of unique history, social complexity, causal ambiguity
  •non-substitutable, i.e. not easily substituted by competitors
  
  
  All four criteria need to be fulfilled!

• Explain the Relational view (RV) to gain a sustained competitive advantage

  
  Competitiveadvantagecanresultfromuniquerelationshipsbetweenorganizations. Sourcesof relational rentscanbe
  

  • Relation-specific assets
    
  • Knowledge sharing routines
    
  • Complementary resources and capabilities
    
  • Effective governance
    

• Which barriers can help relational rents to be prevented from imitation?

  
  

  • Causal ambiguity
    
  • Time compression diseconomies*
    
  • Interorganizational asset stock interconnectedness
    
  • Partner scarcity
    
  • Resource indivisibility
    
  • Institutional environment