1. INTRODUCTION
Timing of market entry is critical for firms in most existing and emerging markets. As a
market evolves, incumbents and new entrants must decide whether to develop and market
products and services for new subfields early, to adopt a wait-and-see approach, or not to
do it at all (Lieberman & Montgomery, 1988; Mitchell, 1991). But entering technology-
intensive emerging markets requires intense collaboration with external partners (Doz &
Hamel, 1998), because of time compression diseconomies (Dierickx & Cool, 1989) or
dissimilarity of activities (Richardson, 1972) and expertise (Powell, Koput, & Smith-
Doerr, 1996). In emerging markets, particularly cross-industry alliances have gained
momentum recently, partly fuelled by learning benefits and the necessity of diverse capa-
bilities in converging markets (Lubatkin, Florin, & Lane, 2001). Thus, a vital question for
firms upon entering an emerging market is how to decide who to ally with.
While most work on strategic alliances has concentrated on why they form, as
cited above, and some work on how they should be organized (Mjoen & Tallman, 1997)
and when firms enter them (Powell & Brantley, 1992; Suarez-Villa, 1998), little research
has focused on who firms ally with (Gulati, 1995). Yet, partner selection is an essential
factor influencing the performance of alliances (Arino & de la Torre, 1998; Ireland, Hitt,
& Vaidyanath, 2002). Also, alliances can be sources competitive advantage (Dyer &
Singh, 1998) and may “shift the very basis of competition to a new level - from firm vs.
firm to (...) rival groupings of collaborators” (Powell, 1987: 68), which means that the
performance of a firm is intimately tied to the performance of its collaborative engage-
ments (Dyer & Nobeoka, 2000). The resource-based view informs partner selection deci-
sions through its core claim that access to strong resources forms the basis for competi-
tive advantage. It follows that the greater a firm’s stock of resources, the greater the
firm’s attractiveness to partners (Ahuja, 2000) and the normative advise to managers is
therefore to seek allies with strong resource endowments in their respective markets. We
challenge this general contention and argue that at times it is advantageous for firms to
ally with weak partners in terms of their resource endowments but whose strategic aspira-
tions are strongly aligned with those of the central firm. Consider the following: Does it
make sense to ally with Coca Cola, because it has a well-developed distribution system, if