Cooperative Strategy - Explained
What is a Cooperative Business Strategy?
Written by Jason Gordon
Updated at April 7th, 2022
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
-
Law, Transactions, & Risk Management
Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
- Business Management & Operations
- Economics, Finance, & Analytics
- Courses
Table of Contents
What is a Cooperative Strategy?Structure for a Strategic Alliance?Joint VentureEquity Strategic Alliance Non-Equity Strategic AllianceWhat is a Cooperative Strategy?
A cooperative strategy (or cooperation strategy) concerns an attempt by an organization to cooperate with other firms in the achievement of its objectives.
The cooperation may serve to reduce costs, sure up supply chains, reduce competition, add resources/knowledge/skillsets, and create other synergies.
The cooperation can be between suppliers, buyers, unrelated businesses, or even competitors - the antitrust law may be implicated.
Generally, this cooperation is carried out in the form of a strategic alliance.
Back to: STRATEGY & PLANNING
Structure for a Strategic Alliance?
The three common structures for a strategic alliance are as follows:
Joint Venture
A joint venture is similar to a general partnership.
Two or more companies come together for a specific purpose for a specific period of time.
The companies work together as partners in promoting their business interests.
The result is a separate and new legal entity with each company serving as an owner.
Equity Strategic Alliance
This is an alliance through which two companies invest money in the other.
As such, there is co-ownership between the companies.
Generally, the arrangement is a merger of equals and each equity partner receives equal control, authority, recognition, and ownership interest.
Non-Equity Strategic Alliance
This is a contractual relationship whereby two or more companies coordinate efforts and share resources.
It can also include a commitment concerning operations and the relationship between the companies.
Generally, there is no co-ownership between the firms.
Any sums of money exchanged or invested are earned as part of service or supply contracts between the companies.
Related Topics Strategy
-
Organizational Strategies
- Growth-Based (Expansion) Strategies
- Inorganic Growth
- Organic Growth
- Diversification
- Concentration
- Integration or Combination (Horizontal and Vertical)
- Asset Acquisition Strategy Definition
- Horizontal Integration - Explained
- Backward Integration - Explained
- Internationalization
- Cooperative Strategy
- Consortium Definition
- Stability and Retrenchment Strategies