A strategy in which firms work
together to achieve a shared objective.
The types of cooperative strategies are given below-
(a)Collusion
Collusion
is
the active cooperation of firms within an industry to reduce output and raise
prices in order to get around the normal economic law of supply and demand.
Example-Shell and
BP in South Africa
(b)Strategic
Alliance
A strategy in which firms combine some
of their resources and capabilities to create a competitive advantage.
Example: In the beverage industry, Nestle
works with Coca- Cola to gain access to the other’s distribution channels
It includes-
a)Joint
venture- A joint venture is formed by two or more separate organizations,
that creates an independent business identity and allocates ownership,
operational responsibilities and financial risks and rewards to each member.
Eg: IOC and
oil tanking GmbH formed a joint venture.
b) Mutual
Service Consortia: A Mutual Service Consortium is a partnership
of similar companies in similar industries who pool their resources to gain a
benefit that is too expensive to develop alone.
Eg:
IBM and Toshiba
c)
Licensing agreement: A licensing agreement is an agreement in
which the licensing firm grants rights to another firm in another country or
market to produce and/ or sell a product.
Eg; KFC’s
branches in Bangladesh
d)
Value-Chain Partnership: The value- chain partnership is a strong and
close alliance in which one company forms a long-term arrangement with a key
supplier or distributor for mutual advantage.
Eg: Value-
Chain partnership between Cisco Systems and its suppliers
