Strategic Management 4e
Strategic Management 4e
4th Edition
ISBN: 9781260779646
Author: Frank T. Rothaermel
Publisher: Mc graw hill
Question
Book Icon
Chapter 9, Problem 1DQ
Summary Introduction

To explain: The benefits and downsides of each mechanism.

Introduction:

Equity:

The alliance where there will be a purchase of equipment in the partner firm, or stake, or investment in the plant or equipment.

Non-equity:

The alliance will only deal with the licensing, supply or distribution agreements between the two firms.

Joint venture:

The company that is created by two or more parent firms together is known as a joint venture.

Expert Solution & Answer
Check Mark

Explanation of Solution

Non-Equity:

Benefits:

  • It is flexible and fast.
  • It is easy to begin or terminate.

Downsides:

  • The alliance is weak.
  • There will be a lack of trust and commitment.

Equity:

Benefits:

  • The tie is stronger.
  • It has more trust and commitment.
  • It can look into new technologies.

Downsides:

  • It has less flexibility.
  • It is slower.
  • It can entail significant investments.

Joint venture:

Benefits:

  • It is the strongest alliance.
  • It has more trust and commitment.
  • It will require an institutional setting.

Downsides:

  • It can entail longer investments and negotiations.
  • The managers have to follow double reporting lines.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Can you analyse the external/ international environment in which Toyota's company operates and identify the key issues which drive Toyota's company. Please Thanks in advance
Hi! Can you guys help me with this? Thank you! Here's the article by Julie Watson from Los Angeles Times called Indonesian fisherman sue Bumble Bee and say the canned tuna giant knew of abuse in its supply chain Please offer authentic insights on how this article connects with global supply chain management.
Can you guys help me on this? Thank you! Here's the authentic insight my classmate wrote about the article they chose here. Please give a little comment on this insight that my classmate just wrote. Thank you!
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Understanding Management (MindTap Course List)
Management
ISBN:9781305502215
Author:Richard L. Daft, Dorothy Marcic
Publisher:Cengage Learning
Text book image
Principles of Management
Management
ISBN:9780998625768
Author:OpenStax
Publisher:OpenStax College
Text book image
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Text book image
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning
Text book image
Foundations of Business (MindTap Course List)
Marketing
ISBN:9781337386920
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning
Text book image
Foundations of Business - Standalone book (MindTa...
Marketing
ISBN:9781285193946
Author:William M. Pride, Robert J. Hughes, Jack R. Kapoor
Publisher:Cengage Learning