Posted in Marketing and Strategy Terms, Total Reads: 2067
Definition: Network Cooperative Strategy
Network cooperative strategy is a strategy where multiple firms work together to achieve shared objectives through multiple partnerships. Cooperative strategies are formed to create more business value for all participating firms as well as for customers and other stakeholders.
Stable and good networks can exploit economies of scale and scope through partnerships and alliances. Network cooperative strategies are generally very effective when firms are situated in close geographical clusters – like Silicon valley in California.
For effective cooperative strategy, there is a need of good social skills, and high levels of interaction among firms, to form effective partnerships.
Network cooperative strategies are mainly useful to create innovative products and offer useful new services. They are also generally found in industries where there is stable growth, and lesser potential risks.
IBM formed a cooperative alliance with SAP to offer a platform to a host of other software platforms to mid sized firms. In California Silicon Valley and Singapore silicon village, number of network cooperative strategies has been formed to offer new products.