Discussion question for business strategy
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WeekTwoLecture-BUS480In-ClassLectureE-MailVersion.pptxPorter’s Competitive Strategies
Cooperative Strategies
Cooperative strategy refers to a planning strategy in which two or more firms work together in order to achieve a common objective. Several companies apply cooperative strategies to increase their profits through cooperation with other companies that stop being competitors.
Extracted from www.Wikipedia.com
Strategic Alliances
#1 Joint Venture
A joint venture is established when the parent companies establish a new child company. For example, Company A and Company B (parent companies) can form a joint venture by creating Company C (child company).
#2 Equity Strategic Alliance
An equity strategic alliance is created when one company purchases a certain equity percentage of the other company. If Company A purchases 40% of the equity in Company B, an equity strategic alliance would be formed.
#3 Non-equity Strategic Alliance
A non-equity strategic alliance is created when two or more companies sign a contractual relationship to pool their resources and capabilities together.
www.corporatefinanceinstiture.com
Joint Ventures
BMW and Toyota co-operate on research into hydrogen fuel cells, vehicle electrification and ultra- lightweight materials
https://www.tutor2u.net/economics/reference/joint-ventures
Joint Ventures
Google and NASA developing Google Earth
Equity Strategic Alliance
A great example is Panasonic. In 2009, Panasonic entered into an agreement to supply Tesla Motors with lithium-ion battery cells to use in its cars. In 2010 Panasonic invested $30 million in Tesla to support the growth of the electric car industry. Over the years, this alliance has grown. In 2017, Panasonic announced it and Tesla would start making batteries at a factory outside of Reno, Nevada.
https://groundfloorpartners.com/could-your-business-benefit-from-a-strategic-alliance/
Non-equity Strategic Alliance
https://groundfloorpartners.com/could-your-business-benefit-from-a-strategic-alliance/
One example is the partnership between Starbucks and Kroger: Starbucks has kiosks in many Kroger supermarkets. Starbucks pays Kroger for space, and Kroger customers have the opportunity to sit down and relax with a coffee while shopping. Both parties benefit nicely.
Core Competencies
A core competency is a competency of the business that is essential or central to its overall performance and success.
Distinctive Capabilities
A distinctive competency is any capability that distinguishes a company from its competitors.
Distinctive Competencies
Internal Environment: Strengths & Weaknesses
Corporate Structure
Corporate Culture
Corporate Resources
Marketing
Finance
Research & Development
Operations & Logistics
Big Audacious Questions
Which of these factors are core competencies?
Which, if any are distinctive competencies?
Which of these factors are most important to the corporate and industries?
Which might be important in the future?
Which functions or activities candidate for outsourcing?
IFAS Summary Table
Identify 5 Strengths and 5 Weaknesses
Assign to each factor a weight in the range from 0.00 to 1.00 according to the importance of the strengths or weakness - the sum of weights must be equal to 1.00
Rate factors as follows:
4 points - major S
3 points - minor S
2 points - minor W
1 point - major W
Multiply the weight and rating for each factor - the result is a weighted ratio
Sum of the weighted ratios of individual factors - result is an overall weighted ratio
Overall evaluation - resulting weighted ratio evaluates the internal position of the organization or strategic intent. The best possible score is 4, the worst is 1. Average values are around 2.5.
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