Question 1:

What does it mean to say that the partners of an alliance have complementary assets? What complementary assets do Renault and Nissan share?

Question 2:

Is it possible that some of the firms mentioned in this case might form a network cooperative strategy?

Alliance Formation, Both Globally and Locally, in the Global Automobile Industry The academic literature on alliances has some interesting To compete, firms often need resources that they don't recent findings, one of which is the rationale that because have but may be found in other firms in or outside of firms are often located in the same country and often the focal firms home industry. As such, these "comple- in the same region of the country, it is easier for them mentary resources are another rationale for why large to collaborate on major projects. As such, they compete firms form joint ventures and strategic alliances within globally, but may cooperate locally. Historically, firms the same industry or in vertically related industries. have learned to collaborate by establishing strategic alli- ances and forming cooperative strategies when there is it's easier for them to jointly work together, for exam- intensive competition. This interesting paradox is due to several reasons. First, when there is intense rivalry, it is the powertrain. This is evident in the European alliance difficult to maintain market power. As such, using a coop- between Peugeot-Citron and Opel-Vauxhall (owned by erative strategy can reduce market power through better General Motors). It is also the reason for a recent U.S norms otcom petition; this pertains to the idea of mutual alliance between Ford and General Motors in devel- forbearance. Another rationale that has emerged is based oping upgraded nine- and ten-speed transmissions on the resource-based view of the firm (see Chapter 3). Furthermore, Ford and GM are looking to develop, Because firms are co-located and have similar needs, ple, to produce engines and transmissions as part of