Strategic Management – Chapter 9: Cooperative Strategies Vocabulary

Vocabulary flashcards covering key terms and concepts related to cooperative strategies presented in Dr. Flint’s Chapter 9 lecture.

Cooperative Strategy

A plan in which two or more firms work together to gain relational or collaborative advantages they could not achieve independently.

Strategic Alliance

A cooperative arrangement where firms share resources and capabilities to reach mutually beneficial strategic objectives.

Equity Alliance

An alliance that involves shared ownership of assets, stock, property, or equipment between partners.

Joint Venture

A type of equity alliance in which partners create and jointly own a legally independent entity.

Non-equity Alliance

A cooperative relationship governed purely by contracts without shared ownership of assets.

Slow-cycle Market

An industry where competitive advantages are shielded from imitation for long periods; alliances protect and extend those advantages.

Fast-cycle Market

A market where advantages erode quickly; alliances help firms speed products to market and stay competitive.

Standard-cycle Market

A market with moderately durable advantages; alliances often aim for economies of scale and efficient market coverage.

Complementary Alliance

Partnership in which firms combine different, yet related, resources to create additional value.

Vertical Complementary Alliance

Cooperation between firms positioned at different stages of the value chain (e.g., supplier–manufacturer).

Horizontal Complementary Alliance

Cooperation between firms operating at the same stage of the value chain (e.g., two manufacturers).

Competitive Response Alliance

Alliance formed to counter a rival’s strategic move, typically yielding parity or short-term advantage.

Uncertainty-Reducing Alliance

Partnership designed to hedge against market, technology, or competitive uncertainty.

Competition-Reducing Alliance

Alliance created mainly to lessen rivalry; least likely to generate sustainable value.

Explicit Collusion

Direct agreements among firms to fix prices, output, or market share; illegal in most developed economies.

Tacit Collusion

Unspoken, coordinated behavior (mutual forbearance) that evolves through repeated interaction; generally legal.

Diversifying Alliance

Corporate-level partnership used to enter new markets or introduce new products/services.

Synergistic Alliance

Alliance aimed at creating economies of scope by linking complementary functional or corporate capabilities.

Franchising

Cooperative agreement where a franchisor licenses its brand and business model to a franchisee in exchange for fees/royalties.

Cross-border Alliance

Partnership between firms from different countries, bringing increased complexity, risk, and potential market access.

Network Cooperation

A system of multiple, interconnected alliances that a firm uses to access a wide array of resources.

Keiretsu

A Japanese network of interlinked firms—either horizontal (centered on a bank) or vertical (organized along an industry chain).

Strategic Center Firm

The focal company in a network that orchestrates and coordinates the activities of partner firms.

Inadequate Contracts

Risk arising when alliance agreements lack sufficient detail or fail to protect partners’ interests.

Misrepresentation

Risk that a partner provides false or incomplete information, whether intentionally or unintentionally.

Failure to Perform

Risk that a partner does not deliver promised resources, capabilities, or effort.

Asset Specificity

Extent to which assets are specialized to a particular alliance, limiting their value in alternative uses.

Holdup

Opportunistic exploitation of a partner after it has made specific, non-recoverable investments in the alliance.

Opportunity Maximization Approach

Alliance management style emphasizing trust, flexibility, and open sharing to pursue new opportunities.

Cost Minimization Approach

Alliance management style focused on detailed contracts and monitoring to control opportunism and reduce long-term costs.

Trust

Belief in a partner’s reliability and integrity; crucial for increasing the likelihood of cooperative success.