Chapter 9: Cooperative Strategy 283
industries characterized as slow-cycle markets. In fast-cycle markets, the firm’s compet-
itive advantages are not shielded from imitation, preventing their long-term sustainability.
Competitive advantages are moderately shielded from imitation in standard-cycle
markets, typically allowing them to be sustained for a longer period of time than in
fast-cycle market situations, but for a shorter period of time than in slow-cycle markets.
Slow-Cycle Markets
Firms in slow-cycle markets often use strategic alliances to enter restricted markets or
to establish a franchise in a new market. For example, Carnival Corporation, owner and
operator of Carnival Cruise Line, recently formed two joint ventures with state-owned
China Merchants Group, which is a conglomerate with businesses in financial invest-
ments and property development as well as transportation. One venture between the
two firms focuses on shipbuilding while the second concentrates on developing new
ports and travel destinations in and around China. The launching of China’s first domes-
tic cruise brand that will target Chinese customers is one outcome associated with the
collaborations between the two companies. Carnival’s interest with these joint ventures is
to quickly scale up its operations in China where the cruise industry is beginning to grow
rapidly. Similarly, China Merchants Group wants to partner with a major competitor in
the cruise industry to better position itself for future growth.^29
Slow-cycle markets are becoming rare in the twenty-first century competitive landscape
for several reasons, including the privatization of industries and economies, the rapid expan-
sion of the Internet’s capabilities for quick dissemination of information, and the speed with
which advancing technologies make quickly imitating even complex products possible.^30 Firms
competing in slow-cycle markets should recognize the likelihood that in the future, they will
encounter situations in which their competitive advantages become partially sustainable (in
the instance of a standard-cycle market) or unsustainable (in the case of a fast-cycle market).
Cooperative strategies can help firms transition from relatively sheltered markets, such as the
travel cruise market in which Carnival Corporation competes, to more competitive ones.^31
Fast-Cycle Markets
Fast-cycle markets are unstable, unpredict-
able, and complex; in a word, hypercompet-
itive.^32 Combined, these conditions virtually
preclude establishing sustainable competi-
tive advantages, forcing firms to constantly
seek sources of new competitive advan-
tages while creating value by using current
ones. Alliances between firms with current
excess resources and those with promis-
ing resources help companies competing in
fast-cycle markets effectively transition from
the present to the future and gain rapid entry
into new markets. As such, a “collaboration
mindset” is of paramount importance for
firms competing in fast-cycle markets.^33
Micron Technology, Inc. and Seagate
Technology LLC are competitors in man-
ufacturing storage solutions, a com-
petitive arena in which establishing
sustainable competitive advantages is all
but impossible. Because of this, innova-
tion is critical to their success as well as for
think4photop/Shutterstock.com
Shown here is a Carnival Cruise Line ship that may soon transport
Chinese customers through the firm’s joint venture with China
Merchants Group.