Alliance Portfolio Resource Diversity and Firm Innovation

Abstract

As inter-firm collaboration plays an increasingly important role in firm innovation, many firms are engaged in multiple partnerships forming portfolios of alliances. Research in marketing has predominately focused on dyadic relationships without considering the important interdependencies among different alliances. This study takes a portfolio approach to examine the resource diversity of multiple alliance partners and its contribution to firm innovation. It argues that resource diversity in an alliance portfolio can only benefit innovation when resources and information are shared across alliances. The authors examine factors that may facilitate or inhibit information and resource sharing across alliances and thus influence the realization of any benefit of portfolio resource diversity. The model identifies a variety of factors along three dimensions, including the composition of an alliance portfolio, alliance management, and the market environment, that moderate the relationship between alliance portfolio resource diversity and firm innovation. This study not only demonstrates the conditions for a firm to benefit from diverse partners, but also highlights the importance of coordination among different alliances, suggesting a portfolio approach for alliance research.

Keywords: innovation, resource diversity, alliance portfolio, alliance management