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This long-term alliance, which represented a significant amount of the overall business of both players, began to unravel when Footlocker reduced its purchases from Nike to protest at constraints on models and prices, and Nike retaliated by reducing shipments on a much greater scale that Footlocker desired (Wall Street Journal, 2003). The mutual hostage defense can also be undermined in certain institutional contexts. A case in point is a China-based cooperative venture that unfolded when foreign irrecoverable investment in a hotel building became vulnerable to a conflict with a partner, China Youth Travel Service, which was undisturbed by the business consequences ...
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