Production agreements
• Subcontracting/outsourcing of production
• Specialization agreements – unilateral/reciprocal
– Seize production – purchase from other party
• Competitive concerns
– Reduced variety, quality, differentiation
– Coordination / information exchange
• Efficiencies
– Cost savings – reduction of duplication
costs
– Economies of scale
Purchasing agreements
• Ad hoc / alliances
• Bi-lateral / multi-lateral
• Competitive concerns
– Foreclosure of inputs / exclusion of competitors
– Coordination
• Commonality of costs
• Information exchange
•
Efficiencies
– Lower purchase
prices
– Reduced transaction costs
– Reduced distribution/transport costs
Commercialisation agreements
• Joint selling, distribution,
promotion or marketing
• Competitive concerns
– Coordination of prices, output, markets
– Information exchange
• Efficiencies
– Cost savings
– Economies of scale and
scope