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watches that meet the needs of today’s tech-savvy consumers. To expand their footprint in
luxury goods, both Google and Intel have established additional alliances. Intel is collaborat-
ing with Luxottica Group SpA to produce smart eyewear and Google is partnering with the
same firm to create new designs of Google Glass.
As is the case with all strategies, alliances such as the one among Google, Intel and TAG
Heuer are not risk free. The degree to which the cultures of technology firms that are strongly
oriented to producing innovation after innovation with the precision-oriented culture of a
luxury Swiss watchmaker can be successfully integrated is an important concern. Another risk
is that the significant amount of coordination that will be required to integrate the firms’
operations that are based in different countries along with all of the companies that are
involved with the international electronics supply chain may not be achieved efficiently.
In spite of these potential risks, the opportunity to innovate in a rapidly expanding global
market seems to be more than sufficient to support the decision among Google, Intel and TAG
Heuer to collaboratively design and produce a novel smartwatch.
Sources: A. Chen, 2015, Google, Intel, TAG Heuer to collaborate on Swiss smartwatch, Wall Street Journal Online,
//www.wsj.com, March 19; M. Clerizol, 2015, There’s something in the way they move, Wall Street Journal Online,
http://www.wsj.com, March 18; L. Dignan, 2015, Can TAG Heuer, Intel, Google collaborate and create a smart enough watch?
ZDNET Online, http://www.zdnet.com, March 19; S. Kessler, 2015, Intel, Google, and TAG Heuer announce a Swiss smartwatch,
Fast Company Online, http://www.fastcompany.com, March, 19; J. Newman, 2015, TAG Heuer, Google, and Intel get together to
announce a conceptual smartwatch, PCWorld Online, http://www.pcworld.com, March 19; J. Revill, 2015, Swiss watchmakers
rise to the smartwatch challenge, Wall Street Journal Online, http://www.wsj.com, March 19; K. Sintumuang, 2015, Will the Apple
watch eclipse the classic Swiss watch? Wall Street Journal Online, http://www.wsj.com, April 17.I
n describing the multiple arenas in which Google competes in Chapter 5’s Opening
Case, we mentioned the firm’s plans to enter the smartwatch market. In this chapter’s
Opening Case, we describe in detail the actions Google is taking to do this. More specif-
ically, we describe the cooperative strategy Google, Intel, and TAG Heuer have formed
in order to apply technological innovations to compete in the world of luxury fashion.
None of these firms could produce the particular type of smartwatch the collaborators
plan to develop without the other two partners. This collaboration is one through which
each company is using some of its unique resources (as well as the capabilities and core
competencies that flow from them) in order to design, produce, and then launch a prod-
uct into a specific market. It is the specific combination of each firm’s unique resources
through which a particular smartwatch is to be developed. Thus, as is the case for all
companies implementing cooperative strategies, these three firms intend to use their
resources in ways that will create the greatest amount of value for stakeholders.^1
Forming a cooperative strategy like the one among Google, Intel, and TAG Heuer has
the potential to help companies reach an objective that is important to all of them, such
as firm growth. Specifically, a cooperative strategy is a means by which firms collabo-
rate to achieve a shared objective.^2 Cooperating with others is a strategy firms use to
create value for a customer that it likely could not create by itself. As noted above, this
is the situation for Google, Intel, and TAG Heuer in that none of these firms could create
the specific smartwatch the firms intended to develop without the combination of the
three companies’ resources. (Throughout this chapter, the term “resources” is used
comprehensively and refers to a firm’s capabilities as well as its resources.)
Firms also try to create competitive advantages when using a cooperative strategy.^3
A competitive advantage developed through a cooperative strategy often is called a
collaborative or relational advantage,^4 indicating that the relationship that develops
among collaborating partners is commonly the basis on which to build a competitive
advantage. Importantly, successfully using cooperative strategies finds a firm outper-
forming its rivals in terms of strategic competitiveness and above-average returns,^5
often because they’ve been able to form a competitive advantage.A cooperative strategy
is a means by which firms
collaborate to achieve a
shared objective.