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Strategic Management 2 The Basis of Strategy: Structure

Joint ventures should mean that each sponsoring organisation has a degree of equity participation, while partnerships may
not, and may or may not share assets.

Consortia are short-term legal entities with sunk costs from each of the partners and which terminate at the end of the
project.

Alliance is a term used for a weaker non-legal-entity kind of operation where firms simply contract to work together on
a gain-share/pain-share basis. Termination clauses would vary with the nature of the co-operation, as would sharing of
facilities and the purchase of equipment.

Example: Various partnerships exist in the automotive industry – Renault engines in Volvo cars.

Networks have been described as a link between supplier and purchaser in the supply chain but a more accurate and useful 360°
division is between different suppliers, imitating the co-ordination methods employed within the firms.

Example: In Italy experiments have been made to introduce networks in technologically similar industries in areas thinking.
360°
called ‘business districts’ in the textile industry, contractors are based in the same region, work for several different firms,
thinking.
sometimes in alliances or partnerships with other contracts, sometimes as sole contract-holder. Technology transfer
opportunities arise for the major textile firms as contractors learn the businesses of other firms.

360°
thinking. 360°

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