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



Coke is not interested in deploying it in your interest to enter a new market? Does it make
sense to ally with Nike, because its marketing skills are superior, if Nike will not give
you access to these or deploy them to support your market entry? Does it make sense to
ally with Sony, because of its skills in design and miniaturization, if Sony is not inter-
ested in these skills being utilized to your advantages? We believe not. However, it may
make sense to ally with firms with less developed but
sufficiently good distribution sys-
tems, marketing capabilities or miniaturization expertise if these firms genuinely aspire to
develop and deploy their skills to the benefit of the alliance.

Theory on partner selection in interfirm collaborations remains in general weak
and more research is required to make it relevant for managers in particular contexts
(Chung, Singh, & Lee, 2000; Geringer, 1991; Hitt, Dacin, Levitas, Arregle, & Borza,
2000; Jones, Hesterly, Fladmoe-Lindquist, & Borgatti, 1998). Jones et al. argue that we
need more understanding of how alliance partners are chosen in multiparty collaborations
among other issues in terms of “the criteria these selections are based upon” (1998: 408).
The key question of this paper is how firms should select cross-industry alliance partners
for entering new markets. Markets emerge every time the technological regime shifts, and
at these points firms decide whether to offer a product or service that differs in some way
from their current offerings (Helfat & Lieberman, 2002). By adopting an evolutionary
perspective, we show that the importance of different partner selection criteria changes
over the course of the industry life cycle.

We use the emergent European market for mobile internet services as an indica-
tive case study. A comparative analysis of alliance partner selection strategies of two key
firms in the market is used as a reference point to illustrate the validity of our proposi-
tions. The case study method is chosen as it is appropriate for theory development (Yin,
1989) in new topic areas (Eisenhardt, 1989). Data was extracted from secondary sources
including annual reports, financial analyses, media announcements, and business press in
general. This approach is widely used and suitable as all significant alliance relationships
can be assumed to be reported in these media (e.g. Singh, 1997).

The paper contributes to the strategic alliances literature on at least three ac-
counts. First, it extends the resource-based view by accentuating strategic aspirations as
an additional criterion for the partner selection decision. Hereby, the paper also appends



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