Cooperative Strategy

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Critically discuss the underlying motivations and associated competitive advantages that explain why MNEs enter into cooperative structures and strategies, using examples.

In recent years there has been an upsurge in the number of MNEs entering cooperative structures and strategies. According to Jones cooperative structure is a means of a substitute or complementary to multinational strategies. It is a strategy in which firms work together to achieve shared objectives. They form partnerships once they believe a local firm had the competitive advantage in the industry or engaged in contractual agreements with public firms. Cooperative strategies and structures have become larger and more complex and crucial more central to the core strategies and competitive advantages of participating firms as a response to the pressures of competing in a global market. In this essay I will firstly discuss the underlying factors which forces MNEs to partake in cooperative strategies. I will then mention the different types of cooperative structures and strategies. Thirdly using examples I will discuss the motives and disadvantages which arise from MNEs entering into cooperative structure and strategies. After which I will close of with some points to consider in building a successfully cooperative strategies.

Cooperative structure and strategy was first coined by firm pre World War 1. In the international business environment in the 21st century there are very few companies which possess all the resources or capabilities they need to develop strategies and organizational capabilities to gain competitive advantage on their own. Firms in the European nations were free to engage in cooperation. The US firms were bound by legislation which causes them not to be free to collaborate. According to Bartlett et al. the key challenge facing companies is their ability to maintain independence by maintaining firm control over its activities which led to the building of strong...
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