Partner Selection Criteria in Strategic Alliances When to Ally with Weak Partners

to be expanded, but in the particular subfield process innovations becomes relatively
more important (Klepper, 1996).

In this competitive environment firms that are present on the market have proven
their aspiration to enter the new subfield. Moreover, strategically slowing down market
development through alliance participation is no longer possible. With limited threat of
opportunistic alliance participation what becomes increasingly important is whether po-
tential partners have the resource endowments to stay. Thus, while the relative high im-
portance of aspiration levels decreases, the relative low importance of resource endow-
ments in contrast increases. There may be both advantages and disadvantages associated
with allying with strong resource-based firms versus strong aspiration-based firms in the
development phase as success requires market expansion through product innovation as
well as efficiency through process innovations, which the two types of firms are likely to
support differently. As a result neither aspiration levels nor resource endowments take
precedence, which may result in partner selection decision being based on alternative cri-
teria.

P3: In the development stage the strength of aspiration levels and the strength of re-
source endowments assume equal importance for partner selection

Note that we do not claim that firms with strong resource endowments necessarily have
low aspiration levels for market entry or vice versa. Our arguments only pertain to the
prioritization of partner selection criteria. The above discussion and propositions are
graphically summarized in figure 1.

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