GSM Lecture 8

Management > Global Strategic Management > Globalisation > Alliances > R&D alliances > external/internal sources > Core competences > Reasons > More information

More information

Type of alliance determined by the technological characteristics of sectors

Equity agreements are preferred in mature industries, while contractual alliances are preferred in high-technology industries.

Changes have occurred across industries, rather than countries, meaning that differences between countries is insignificant.

Unanswered questions

Welfare issues, optimal use of public resources, university-firm partnerships and the role of SMEs are all issues that have not been addressed, yet could be affected by alliances.

Not everyone uses alliances

Not everyone likes the idea of alliances, for the perceived danger of sharing secrets of a firm's core competences, which they have spent years building, is an unpleasant prospect for some companies.

Where outsourcing doesn't work

Outsourcing is not recommended under the following conditions:

• In the absence of multiple non-distinguishable sources

• When inputs are unique and non-substitutable (location-specific inputs, like production costs, or core competences)

• When tacit or non-codifiable inputs are required (difficulty in replicating processes or supplier can charge monopoly rates)