Cooperative Strategies

Junior (College 3rd year) ・Business ・MLA

A cooperative strategy is an effort by a company to accomplish its goals by collaborating with other companies through alliances or partnerships rather than competing with them. For some businesses that are weak in certain industries, it might be a huge benefit. The strategy is used by many businesses in the market today. Here is an illustration of a two companies working together cooperatively.
Suzuki, a technology and experience firm, worked with Muruti, an automaker, in the aforementioned partnership. The collaboration resulted in Muruti Suzuki: Way of Life. While most partnerships do not work out as expected, the cooperation between the Suzuki motors, an Indian company and Muruti, an Indian company, has been of astounding success. The venture sped up growth of the economy as well.

Type of cooperative strategy

Joint Venture: The type of cooperative strategy between the two companies is a joint venture. Joint ventures refer to business entities that are formed by two or more companies. It usually characterised by shared ownership. It is aimed at sharing the expense and benefits of the undertaken project. In most cases, joint ventures are majorly formed with the objective of saving money.

Purpose for the cooperative strategy

The main aim for the partnership was for the two companies to “cross-pollinate” each other. Muruti would help Suzuki to improve the IT systems in the automobile industry while Suzuki helped Muruti to improve quality and Technology in the same. In so doing, the companies were able to lower costs while at the same time increasing their pool of profit. The increase in profits was because the two companies were able to use the distribution networks that had been developed by the partner company by taking advantage of their brand image.

Result of the cooperative strategy

The joint venture between the two companies increased the volumes of productions and sales of automobiles both in India and as exports to the other continents. This was due to improvement in the quality of the products. With the initial objective of making the ownership of cars simple for the middle class Indians, the ownership has since widened and the sole mission remains to motorise the country.

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