Tue 15 Jun 2010
Disadvantages of Strategic Alliances
Posted by Admin under International Business ManagementNo Comments
-Competitors get low cost route to technology and markets
International Business Management
Archived Posts from this Category
No Comments
Tue 15 Jun 2010
Advantages of Strategic Alliances
Posted by Admin under International Business ManagementNo Comments
-Facilitate entry into market
-Share fixed costs
-Bring together skills and assets that neither company has or can develop
-Establish industry technology standards
Tue 15 Jun 2010
•Cooperative agreements between potential or actual competitors
Tue 15 Jun 2010
Core Competencies match with Entry Mode
Posted by Admin under International Business ManagementNo Comments
If what you are good at is…
•Technological Know-How
-Avoid licensing and joint-venture arrangements
-Probably use a wholly owned subsidiary
•Exception: If the technological advantage is only transitory
•Management Know-How
-The firm’s valuable assets include a brand name
-Franchising and subsidiaries are very attractive
-Often times a joint venture is politically more acceptable
Tue 15 Jun 2010
-Risk giving control of technology to partner
-May not realize experience curve or location economies
-Shared ownership can lead to conflict
Tue 15 Jun 2010
-Benefit from local partner’s knowledge
-Shared costs/risks with partner
- Reduced political risk
Tue 15 Jun 2010
-Reduces costs and risk
-May prohibit movement of profits from
one country to support operations in another
one country to support operations in another
-Quality control
Tue 15 Jun 2010
-Reduces development costs and risks
-Works in unfamiliar or politically
volatile market
volatile market
-Overcomes investment barriers
-Others can develop business applications of your know-how
Tue 15 Jun 2010
Disadvantage of Turnkey projects
Posted by Admin under International Business ManagementNo Comments
-No long-term interest in the foreign country
-May create a competitor
-Selling process technology may be selling competitive advantage as well
Tue 15 Jun 2010
-Can earn a return on knowledge asset
-Less risky than conventional FDI