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Strategic Cooperation – Value links and chains

Background
While firms strive to develop their strategy in terms of building their competitive advantage, and market entry, some of the strategies they would consider are cooperative strategies. Even as an entrepreneur addressing the same frame of thought finds an entry point or opportunity for the services or products to the market. Understanding strategic cooperation as a form of entrepreneurial strategy in entering a market makes more sense in a wider geographic area with dispersed population. And with value links and chains creation, do entrepreneurial firms build on existing products and add more value to the end product by offering some required service.
Considering, the African context, where there are many small pocket productions of raw materials, that could be turned into products that are of more value to the consumer, learning the importance of creating strategic cooperation between the producers and the institutions that would buy the products to create something of more value is important. Putting into context, one would believe, this was the model of coming up with Africa Growth and Opportunity Act (AGOA)by the US government and now the scramble for the African farm lands by other big investors, a kind of strategic cooperation; money for production of raw materials for the foreign industrial companies, etc.
When reviewing the forms of strategic cooperation, one tries to decide which form best fits within the business context. While others would choose to have joint ventures, another equity strategic alliance or non-equity strategic alliance, all depends on what these alliances hold in store to benefit the entrepreneur.
Though why consider value links and chains as an important point of discussion, is that given the context of the world today, not all institutions have access to create their own raw materials, and also most the raw materials produced need to undergo some refinement, thus implying a link between. And who owns this link or runs the chain; why do firms use this model.

Objectives
In following the discussion, you will:
• As an entrepreneur understand which forms of strategic cooperation would make more sense to apply
• Understand value chains and links concept and how to apply it in any business
• Understand through which mechanisms firms try to build competitive advantage

Discussion
In the video presented, the discussion is geared towards elaborating the concept of value chains and links in strategy development and management of firms:


Summary
The market always has gaps for an entrepreneur to discover what opportunities lie therein and can be harnessed. This requires an entrepreneur to be innovating and creative, and does not necessarily require the creation of anything new but the effective utilization of resources, such as in the strategy development an entrepreneur could start a warehousing business or a packaging business. These forms of value addition are of high demand and are mostly lacking in many African countries, where the focus has been mostly on the production of raw materials, with the question on how to create a longer shelf life of these materials lacking. Many firms try to apply value addition concepts but most fail, understanding the strategy of cooperation in non-equity strategic alliance is important for the success of the business.

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