COMM 315 Lecture Notes - Lecture 7: Market Power, Franchising

• School: Concordia University
• Department: Commerce
• Course: COMM 315
• Professor: Vladimir Titorenko

Document Summary

There are three alternative growth and expansion models being internal development, strategic alliances and mergers and acquisitions. Firms collaborate for the purpose of working together to meet a shared objective -cooperating with another firm creates value for customers. It exceeds the cost of constructing customer value in other ways and establishes a favorable position relative to competitors. Reasons for collaborating in different market types are: Slow cycle markets: a competitive advantage is shielded here from imitation for long periods of time and imitation is costly. Collaborating would therefore allow a firm to gain access to a restricted market, establish a franchise in a new market and maintain market stability. Fast cycle markets: a competitive advantage is not shielded here, preventing long- term sustainability. Collaborating here would allow a firm to speed up product or service development, speed up new market entry, maintain market leadership, form an industry technology standard, and overcome uncertainty.