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

Partner Selection Criteria in Strategic Alliances:
When to Ally with Weak Partners1

Mikkel Lucas Overby

Copenhagen Business School

Njalsgade 80

2300 Copenhagen S

Denmark

Email: [email protected]

Abstract:

In many emergent markets, cross-industry alliances are necessary to develop and market new
products and services. The resource-based view suggests that firms form alliances to access or
acquire valuable, rare, non-imitable and non-substitutable resources, and that such access
determines the level of profits. Hence, firms confronted with the choice between partners with
strong versus partners with weak resource endowments should choose the former. We contest this
view and argue that firms benefit from allying with weak partners at certain times. In essence, we
suggest that partner selection involves assessing the relative importance of strong resource
endowments and aligned strategic aspirations over time. By adopting an evolutionary approach, we
show that appropriate partner selection criteria are dynamic and may involve allying with weak
partners in the initial exploratory stage, with weak and/or strong partners in the development stage
and with strong partners in the maturity stage. Our findings suggest that the resource-based
understanding of strategic alliances should be extended to include a more profound role for a
partner firm’s strategic aspiration.

Key words: Strategic alliances, partner selection, resources, aspirations

JEL Codes: L14, L86

ISBN 87-7873-171-2

Acknowledgements

We gratefully acknowledge valuable and stimulating comments from Volker Mahnke and
participants at the DRUID Winter Conference 2005.

1 This research was conducted as part of the Mobiconomy project at Copenhagen Business School. Mobiconomy is partially
supported by the Danish Research Agency, grant number 2054-03-0004.

www.druid.dk

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