Question

1. Give some advantages and disadvantages of cooperative versus competitive strategies (40-60 words).

2. A company has $1 million to spend on a new strategy and has considered market development versus product development. What determining factors would be most important to consider (50-80 words)?

Answer 1

Cooperative Strategy: This is a strategy wherein two or more firms work together towards a common goal or a common objective.

Advantages of Cooperative Strategy are as follows:

1. Gives access to wider market
2. Creates a synergy among the organizations

Disadvantages of Cooperative Strategy are as follows:

1. Individual identity of the organization gets lost
2. Companies will be reluctant to take risks hence growth will be slower.

Competitive Strategy: This is a strategy pertaining to an individual organization wherein each firm compete amongst each other to be the market leader.

Advantages of Competitive strategy:

1. Helps in developing a stronger action plan
2. Communication is easy.

Disadvantages of Competitive Strategy:

1. Limited availability of resources as this strategy pertains to an individual organization.
2. Companies will take risks in business which might sometimes cause serious damage to the organization.

The organization will have to think wisely before investing on research and development since return on investment have to be assessed before investing on either market development or product development.

Hence the following are the factors that the organization will have to be assessed before investing:

1. Return on Investment (ROI)
2. Waiting time for realizing ROI
3. Scope for growth of organization
4. Market Position
5. Market retention

These are the basic factors that an organization has to consider before investing on either market or product.