Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance.

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The dealership will be unstable because there is no common constitution and code of conduct governing the business for the alliance.

The following risks may be faced by an independent dealer in a coalition;

Already well-established dealers may face the risk of incurring advertisement costs to no gain and instead popularize their market competitors in the alliance.

Dealers in the alliance with an upper price cut face the risk of lowering their prices and thus their profits, or else they face the risk of losing their market share to those with lower prices in the alliance.

Small dealers with products considered inferior may lose their market identity since the pomp in such a drive is centered on bigger and well-established dealers. For instance, if one motor dealer deals in Nissan and another one deals in Toyota and Nissan model commands the market because it is considered superior to Toyota models if the two dealers enter such an aforementioned alliance, the dealer who deals in Toyota stands to lose his identity to Nissan because the superior features of Nissan will out-feature Toyota’s in a common venture such as marketing and advertisement drive.

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Academic.Tips. (2021) 'Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance'. 8 July.

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Academic.Tips. (2021, July 8). Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance. https://academic.tips/question/imagine-that-independent-dealerships-form-an-alliance-to-pool-resources-like-advertising-and-share-best-practices-so-as-to-compete-better-against-the-larger-chain-dealerships-is-a-coalition-stable/

References

Academic.Tips. 2021. "Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance." July 8, 2021. https://academic.tips/question/imagine-that-independent-dealerships-form-an-alliance-to-pool-resources-like-advertising-and-share-best-practices-so-as-to-compete-better-against-the-larger-chain-dealerships-is-a-coalition-stable/.

1. Academic.Tips. "Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance." July 8, 2021. https://academic.tips/question/imagine-that-independent-dealerships-form-an-alliance-to-pool-resources-like-advertising-and-share-best-practices-so-as-to-compete-better-against-the-larger-chain-dealerships-is-a-coalition-stable/.

Bibliography

Academic.Tips. "Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance." July 8, 2021. https://academic.tips/question/imagine-that-independent-dealerships-form-an-alliance-to-pool-resources-like-advertising-and-share-best-practices-so-as-to-compete-better-against-the-larger-chain-dealerships-is-a-coalition-stable/.

Work Cited

"Imagine that independent dealerships form an alliance to pool resources (like advertising) and share best practices so as to compete better against the larger chain dealerships. Is a coalition stable? Identify three risks that an independent dealership may face in such an alliance." Academic.Tips, 8 July 2021, academic.tips/question/imagine-that-independent-dealerships-form-an-alliance-to-pool-resources-like-advertising-and-share-best-practices-so-as-to-compete-better-against-the-larger-chain-dealerships-is-a-coalition-stable/.

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