that selection of a good partner heavily depends on goal congruence between partners.
Taking the argument further Hamel, Doz & Prahalad (1989) argue that when seeking col-
laborators for technology-related projects, firms should seek partners whose strategic
goals converge, while their competitive goals diverge. Koza and Lewin (2000) argue that
on of the most common reason for alliances to fail is lack of recognition of the close in-
terplay between the overall strategy of the firm and the role of an alliance in that strategy.
We suggest that the aspiration level of a firm to enter a particular technical subfield of an
emerging market with its resources - weak or strong - is an important criterion for partner
selection. Strong and aligned strategic aspirations are positively related to cooperative
behavior and thus partner selection (Axelrod, 1984). The degree of this aspiration for en-
try is primarily determined by the expected relative changes in the demand for a firms
products upon entering a new market - its shadow of the future (Dasgupta & Stiglitz,
1980; Klepper, 1996). Different firms will have different potential gains from entering a
market, which make it advantageous for some firms to enter a market at one point in
time, whereas others will find it unattractive at this point. Incumbents and potential new
entrants are for instance likely to act strategically different as market entry for incum-
bents will cannibalize revenue streams as existing customers will migrate to the new seg-
ment, whereas entry for new-comers allows for additional revenue streams (Reinganum,
1985).3 Thus, incumbents may not have the incentive (Geroski, 1995) or the choice to
enter early as the demand of their existing customers shape’s the allocation of resources,
which may mean that they foreclose new opportunities (Christensen & Bower, 1996).
Mitchell (1991) concludes that incumbents will perform better if they postpone entry
until new entrants have tested the products and markets, and Afuah and Utterback (1997)
note that market leaders may retrench to attempt to prolong the viability of their
established positions for as long as possible. Such behavioral differences will fit to differ-
ent degrees with the strategic aspirations of the firm seeking an ally. These considerations
are important for partner selection in markets, where entry cannot be made by a single
firm but necessitates coordination of entry strategies across firms in an alliance.
3 Not all existing customers migrate instantly and often product and service generations co-exist for periods
of time, yet this is less important for the argument here.