considered the key resource-based advantages of Nokia such as locked-in installed cus-
tomer bases, highly valued brand names, well-established distribution systems, proven
marketing skills, and general knowledge of the European market.
Very limited information is available about the partner selection decisions in the
development and maturity stages, as the market today is merely on the verge to the de-
velopment stage. However, it is worth noticing that the strong European handset manu-
factures are now entering the 3G market. “3” offers both a Sony Ericsson and a Nokia
handset but no alliance has been formed in terms of co-development, co-branding or ex-
clusivity. Vodafone, on the other hand, entered the 3G subfield relatively late and imme-
diately established close relationship with the strong handset manufactures in the market.
In sum, there appears to be a pattern in the entry decision within the European
handset manufacturing market. Nokia, Siemens and Sony Ericsson generally appeared as
the strongest firms in terms of resource endowments on the European market although
Siemens and Sony-Ericsson may have had insufficient R&D skills in terms of 3G. How-
ever, it was Motorola, NEC and Sharp, all relatively weak firms in this market, which
entered in the exploratory stage through partnering with “3” and Vodafone. The three
weaker handset manufactures had strong strategic aspirations for entering the European
market as their net potential gains were high. Thus, “3” through allying with Motorola
and NEC and Vodafone through its alliance with Sharp in the very early stage of the in-
dustry life cycle were enabled to enter the market.
6. DISCUSSION
An essential but often neglected issue in strategic alliance research is the partner selection
decision. Transaction cost economics emphasizes cost minimization as the rationale for
strategic alliances, but Eisenhardt and Schoonhoven (1996) criticize the approach for its
static efficiency focus and argue that an extended resource-based view is better capable
of capturing the strategic rationales of interfirm collaboration. However, when it comes to
explaining partner selection decisions, the resource-based perspective may be subject to
similar criticism, as it focuses on static resource endowments of firms. Our explanation
for partner selection links to the resource-based view. However, we extend the theory by
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