Discussion Questions

November 8, 2012

POSTECH Strategic Management of Information and Technology Laboratory(POSMIT: http://posmit.postech.ac.kr)

Dept. of Industrial & Management EngineeringPOSTECH

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Discussion Questions

■ Chapter 8. Collaboration Strategies

3. Identify an example of collaboration between two or more organizations. What were the advantages and disadvantages of collaboration versus solo development? What collaboration mode did the partners choose? What were the advantages and disad-vantages of the collaboration mode?

– LG electronics & Intel’s cross licensing (August, 2000)• Set of LG electronics + Chip of Intel• Freely using patents possessed by each other• Establishing collaborating business structure in technology, product selling, and intellectual

property fields

– Advantages and disadvantages of collaboration• Advantages: Using technology the company doesn’t have, Distributing the risk of failure• Disadvantages: Sharing the profit, Difficulty in reaching in an agreement, Risk to leak business

secrets

– Collaboration mode of LG electronics and Intel: cross licensing• Advantages: Expanding the pool of usable technology, Obtaining needed technology immedi-

ately• Disadvantages: Risk of exposing the company’s key technology, Obligation to share the profit

Difficulty in setting the range of technology to share

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Discussion Questions

■ Chapter 8. Collaboration Strategies

4. If a firm decides it is in its best interest to collaborate on a development project, how would you recommend the firm go about choosing a partner, a collaboration mode, and governance structure for the relationship?

– Things to check when choosing a collaboration partner• Resource fit: Degree to which potential partners have resources that will add value• Strategic fit: Measure of the compatibility of partners’ objectives and cultures• Compatible objectives (not necessary to have identical objectives)

– Things to check when choosing a collaboration mode: • Providing the best advantages while limiting the risks• Using the table of tradeoffs

– Type of governance structure• Function of the level of resources risked in the collaboration

(more resources = stronger control mechanisms such as contracts and equity sharing)