ECON 1 Lecture Notes - Lecture 10: Hd Dvd, Legal Personality, Adverse Selection
Document Summary
Joint venture: cooperating firms create a legally independent firm in which they invest and from which they share any profits that are created. Strategic alliance opportunities: can take the form to improve the performance of its current operations, create a competitive environment favourable for superior performance and facilitate a firm s entry into or exit from markets or industries. Increasing returns to scale: the value on each product is increase as the number of products increases (e. g. telephones, fax-machines, computer. Strategic alliances on their own are not rare but they do serve different purposes and these different purposes of alliances might be rare. The benefits occurring from a strategic alliance need to be rare and they are rare as relatively few firms have the complementary resources and capabilities to form an alliance. The purpose of organizing a strategic alliance is to increase and maximize the benefits of an alliance through cooperation and decreasing and minimizing the incentives to cheat.
