8/17/2019 Answer_Q3

1/6

Strategic alliances

Organizational structure

Economy of scale

Vertical integration

Horizontal integration

Likelihood of anti-trust secruity

Involves cooperation, coordination, andinforation sharing for a oint proect !y theparticipating "rms

#chieve through vertical colla!oration $e%g%tile manufacturer teamed up &ith interior

designer）or they may also involve "rmsthat are not in the same industry% Verticalintegration is pre'ered &hen the a!ility ofoutside market specialist to achieveeconomy of scale is limited

Implies a greater level of coperation,coordination, and information transmissionmaking it closer to vertical integration

 (he risk of information leakage is moresevere in alliances !ecause the conditionsthat tend to make alliance desira!le thatoften force the parties to e)change aconsidera!le amount of closesly heldinformation

8/17/2019 Answer_Q3

2/6

 *oint ventures +#

#liiance &here a ne& independentorganization is created and ointly o&ned!y the promoting "rms

or e.ciency reason, +# can increase theeconomies of scale and scope

8/17/2019 Answer_Q3

3/6

Doing Business Infrastructure

1840

1910

2009

/umerous IntermediariesSu!stantial price risk froparticipantsInfre0uent transactionsScarcity of Information

1oorly developed+any small family run "rms+arkets &ere local

2% +ass production technolgiesmade possi!le of high volume lo&cost manufacture3% 4ailroad dominatedtransportation and allo&ed massdistri!utors to reach scattered

customers5% (elegraph and telephoneimproved6% +anufacturing !ecame morevertically integrated7% +ultidivisional "rms emerged8% Industries !ecame concentrated9% Increased la!or related con:icts

2% Vertically integrated "rms have!een decining3% #lliances and *V &ork !etterthan +#5% ;iversi"cation yields to

8/17/2019 Answer_Q3

4/6

Transportation Communication

4ailroads &ere fragmented=ater&ays for long distance

1ostal service &as dominant4elied on the horse andstagecoach

 (elegraph &as e)pensie andimportant for time-sensitive

information

2% #ir, 4ail, >round are !ettercoordinated

2% Sophisticated communicationand data processing technologies3% ?apacity for instantaneoustransmission of comple)information5% (echnology enhanced &orkerproductivity6% ?oordination of activities has!ecome easier

8/17/2019 Answer_Q3

5/6

Finance Production Technolog !o"ernment

@usiness &ere proprietorship orpartnership --A long term de!tdi.cult to o!tainShares of stock &ere not easilytraded and cost of capital &as high

/o institutional mechanism e)istedutures trading &as yet to come

actories used century oldmethods of production

 (e)itle &as mechanizedBse of standardized parts&as ust !eginning

High volume and scaleintensive production none)ist

Involved in largainfrastrucutre investment>ovt% regulation in !usiness&as emerging1rime meridien conference

2% Securities markets traded shareof industrial "rms3% ?redit !ureaus porvided creditrelated info5% Innovations appeared6% 1u!lic disclosure &as in vogue

2% >overnment regulatione)tended to such areas,corporate la& antitrust, ad&orker safety3% Increased regulationforced managers to collect

data on internal operations5% +andatory secondaryschooling

2% 4egulation --A sta!le "nancialsector3% ?apital market !ecome moreactive in evaluating "rmperformance5% >lo!alization --A ma !ecomepossi!le6% Li0uidity crisis slo&ed theeconomic in 3CCD

2% +odern technologiesmade lo&-cost tailor madeproduction possi!le

2% (raditional regulation has!een rela)ed3% 4egulation increased insome areas $&orkplacesafety, discrimination andenvironmental protection5% Intergovernmental traties--A free trade zones6% #nti trust policy7% >overnment policysupport !asic research and4; proects

8/17/2019 Answer_Q3

6/6

Business

Limited production to traditionalmodesServing local markets+ass production technologies &ouldnot have !een useful

Info a!out prices, sellers, and !uyers&as not readily availa!le?redit availa!le !ased on personalrelationship@usiness &ere small and informallyorganized

2% E)pansion of markets, productlines, and production scale3% High volume production due tone& technologies5% >ro&th of "nancial infrastructure--A large "rms !ecame via!le

2% +arket size increased3% ocus on narro& range of activitiesand enoy economies of scale5% inancial innovations ena!lesfaster gro&th