Interrelationship Source of Possible Form Potential Compromise Cost

Relationship of Sharing Competitive

Advantage
Infrastructure Common firm Shared Smaller support Need for
infrastructure accounting staff coordination is
needs higher
Shared legal Lower cost
department People may have
Critical mass to
differing interest and
Shared attract top-level
needs
government managers
relations Conflict may occur
more often
Shared hiring
and training
Technology Common Join Lower product Same technologies,
product technology or process cost but tradeoffs in
technology development applying the
Larger critical
technology are
mass in R&D
different among
business units
Procurement Joint Common Lower cost of Inputs needs are
procurement purchased inputs different in terms of
inputs quality or
specifications,
leading to higher
cost than necessary
in business units
requiring less quality
Manufacturing Identical or Shared Lower costs Needs for
similar component component design
fabrication fabrication and quality differ
process
Marketing Common Shared sales Lower selling Different buyer
geographic force cost purchasing
market behaviour
Better sales
force utilization Different type of
salesperson is more
effective