c ooperation and competition among firms p rofessor a lessandro a rrighetti baldini lisa ballotta...
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COOPERATION AND COMPETITION AMONG FIRMS
PROFESSOR ALESSANDRO ARRIGHETTI
Baldini Lisa
Ballotta Lucrezia
Cenci Chiara
Università degli studi di ParmaFacoltà di Economia
Academic year 2013-2014International business and development
INTERNATIONAL COOPERATION ON
INNOVATION
DIFFERENT TYPES OF INTERACTIONS
• Strategic alliance
• Competitive relationships
• Consortium
• Franchising
• Joint-venture
REDUCING AND SHARING COSTS
I. To maintain a good relationship between managers and directors
II. To send back damaged goods
III. Costs of hierarchy
IV. Transport costs
IT IS IMPORTANT TO:
I. Stimulate customers’ needs
II. Have a good image of the company
III. Have a common vision
IV. Acquire means of distributions
V. Competition differentiation
PSYCHOLOGICAL VALUES
Communication with customers Attraction of new customers
Earning the loyalty of customers
BUT IT’S MORE DIFFICULT..
TO KEEP CUSTOMERS!
INFORMATION REVOLUTION
Digitalisation of technologies
Digital information is part of our physical life!
WHAT IS R&D?
Research and development (R&D) comprise creative work undertaken on a systematic basis in order to increase the stock of knowledge (including knowledge of man, culture and society) and the use of this knowledge to devise new applications.
HOW IS R&D MEASURED?
GERD (Gross Domestic Expenditure on R&D):It’s the main aggregate that is used to compare investments in R&D in different countries.Consists of the total expenditure in R&D carried out by all resident companies, universities, institutes, government labs, and includes also R&D founded from abroad.
INVESTMENT IN R&D
European countries increased of 50% in the last ten years (actually invest less than 3% of GDP on R&D)
Asian countries +75% in the last ten years China +855% BRIS +145% Rest of the World +100%
DIFFERENCES BETWEEN
FIRMS ENGAGED WITH DOMESTIC PARTNERS: Smaller Low tech sector
FIRMS ENGAGED WITH INTERNATIONAL PARTNERS: Larger firms Often multinationals High-tech sector Absortive capacity
(high engagement in R&D, highly skilled labour)
DIFFERENCES BETWEEN COUNTRIES
Portugal: An import country,
most of alliances are done to boost sales
Germany: An export country,
most of alliances are done to exploit innovation technology
Internationalization
R&D
Innovation
Technology
Strategic Alliances
Investments
LINK BETWEEN STRATEGIC ALLIANCES AND INNOVATION
VARIABLES OF ANALYSIS: Duration of alliances Innovation of the sectorSECTOR OF ANALYSIS: Analysis of the medical sector because it’s
easy measurable since every innovation is certified by a PATENT, and registered a huge increase in alliances and joint venture in the last 20 years.
PATENTS
PLACE : usually innovations are patented in countries in which better economic results are possible, taking in account the reputation of the country (some are excluded since less developed in this sector).
Slovenia saw an increase in patents from 1995 to 1998 related to the economic development that has occurred.
Example of Novartis AG Novartis AG, part of Novartis-Erfindungen
and Sandoz Patent are examples of indipendent firms that joined togheter after the development of patents.
FROM PATENTS TO FUSIONS
NOVARTIS STRATEGY
CONCLUSIONS
Innovation is effectively linked with collaboration.
Firms tend to collaborate with firms to obtain patents in one technological sector, with universities or institutes to obtain patents in more technological fields research is linked with innovation.
GLOBALIZATION
EXPANSION OF FIRMS INTO NEW MARKETS AND COUNTRIES
GROWING NUMBER OF INTERNATIONAL R&D AND INNOVATION PARTNERSHIPS
THE PRESENCE OF DIFFERENCES IN INTERNATIONALIZATION
OF FIRMS’ ACTIVITIES IN A COUNTRY
LEAD TO DIFFERENCES IN THE FACTORS THAT
INFLUENCE INNOVATIVE COOPERATIONS
WITH FOREIGN PARTNERS
INTERNATIONALIZATION: in economy, the process of increasing
involvement of enterprises in international markets
THE ENTREPRENEUERS NEED
TO POSSESS THE ABILITY TO HAVE AN UNDERSTANDING
OF THINK GLOBALLY OF INTERNATIONAL CULTURES
TWO MAIN FACTORS TO CAPTURE THE LINK BETWEEN
LEVEL OF INTERNATIONALIZATION
INNOVATIVE COOPERATION
1- EXPORT STATUS OF THE FIRM
2- FOREIGN INVESTMENTS AND APPARTENENCE TO A
MULTINATIONAL GROUP
INTERNATIONALIZATION OF INNOVATION COOPERATION
IMPLY SPECIFIC CAPABILITIES:
o HIGHER RESOURCE REQUIREMENTS
o TO OVERCOME SOCIAL AND CULTURAL BARRIERS
o EXPERIENCE IN DEALING WITH FOREIGN ACTORS
EXPORTERS MIGHT BE MORE LIKELY TO COOPERATE
WITH FOREIGNERS BECAUSE THEY ARE USED TO:
DEVELOPE MORE INNOVATIVE PRODUCTS TO BE
SUCCESSFUL IN FOREIGN MARKETS
FACE GREATER COMPETITION
TREAT WITH FOREIGN PARTNERS
IN OUR EXAMPLE…
GERMANY PORTUGAL
THEY DIFFER FOR:
o LEVEL OF EXPORT- ORIENTATION
o HIGH- TECH KNOWLEDGE
o ECONOMIC SITUATION
o SITUATION REGARDING INTERNATIONALIZATION
o SIZE AND POWER
HIGH- TECH
EXPORTER
POSITIVE EFFECT ON THE PROBABILITY OF
INNOVATION COOPERATION
LOW- TECH
NON- EXPORTER
FEW OPPORTUNITIES OF INNOVATION COOPERATION
GERMANY PORTUGAL
INNOVATION ENTERPRISES
(TOT)
INNOVATION ENTERPRISES WITH
COOPERATION
European Union (15 countries) 93.974 24.699
Belgium 1.526 489
Denmark 2.181 1.243
Germany 25.484 8.220
Ireland 1.375 499
Spain 5.457 1.133
France 10.096 3.574
Italy 18.965 2.115
Luxembourg 80 23
Netherlands 4.293 1.226
Austria 2.786 638
Portugal 2.383 381
Finland 831 588
Sweden 2.079 1.217
United Kingdom 16.439 5.253
European Economic Area (EU-15 plus IS, LI, NO) 95.096 25.253
Norway 1.122 553
BEING PART OF MULTINATIONALS INFLUENCE THE
INTERNATIONAL COOPERATION
… IN LOW- TECH COUNTRIES…
PORTUGAL SIGNIFICANT EFFECT
GERMANY NOT RELEVANT
WHY?
DIFFERENT INTERESTS FOR MULTINATIONALS
GERMANY TO EXPLOIT THEIR KNOWLEDGE BASE
PORTUGAL BOOST THEIR SALES
BASE FOR INNOVATION ACTIVITIES WITH OTHER EUROPEAN COUNTRIES
CONCLUSION
THE DIFFERENT STRUCTURE OF
MULTINATIONALS TOGETHER WITH THE
DIFFERENCES IN EXPORT INTENSISTIES
BETWEEN COUNTRIES SEEMS TO
INFLUENCE THE DECISION TO COOPERATE
IN INNOVATION WITH FOREIGN PARTNERS
THANK YOU FOR THE ATTENTION
THE END