Question

How do companies use cooperative strategies to innovate? Please provide 2 examples.

Answer 1

Both entrepreneurial firms and established firms use cooperative strategies i.e. strategic alliances and joint ventures to innovate. An entrepreneurial firm use strategic alliances to seek investment capital as well as established firm's distribution capabilities to successfully introduce one of its innovative products to the market. Establsihed firms may need new technological knowledge and can gain access to it by forming a cooperative strategy with entrepreneurial ventures .

Alliances between large pharmaceutical firms and biotechnology companies increasingly have been formed to integrate the knowledge and resources of both to develop new products and bring them to market.