Skip to main content
Log in

A theoretical model of the formation and dissolution of emerging market international marketing alliances

  • Conceptual/Theoretical Paper
  • Published:
Journal of the Academy of Marketing Science Aims and scope Submit manuscript

Abstract

As emerging market international marketing alliances (E-IMAs) are becoming popular as instruments of growth for firms from the developed markets that are attempting to expand into emerging markets, there is a growing need to understand how these E-IMAs are formed, operate, and even get dissolved in the emerging markets. Extant theories on IMAs, although limited, have primarily focused on alliances that are formed and operate in developing markets. However, as the institutional context of emerging markets differs significantly from that of developing markets, these existing theories are not sufficient to explain and predict phenomena related to E-IMAs. Therefore, using data from in-depth interviews with senior executives from 106 companies involved in marketing alliances, this study develops a new theoretical model based on the awareness-motivation-capability framework that can explain and predict phenomena related to E-IMAs. Related propositions are presented for both researchers and practitioners who are interested in studying or developing E-IMAs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1

Similar content being viewed by others

Notes

  1. An alliance can be structured as either (1) a distinct corporate entity in which each of the alliance partners hold an equity position or (2) a distinct interorganizational entity in which the alliance partners commit to collaborative agreement of relevant skills and resources (Varadarajan and Cunningham 1995).

  2. We thank a reviewer for the suggestion.

  3. We thank a reviewer for guiding us on this additional contribution.

  4. http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual-Reports/English/DB2018-Full-Report.pdf.

  5. https://blogs.timesofindia.indiatimes.com/the-interviews-blog/combining-profit-in-pursuit-of-social-goals-will-unlock-a-pool-of-capital-that-would-otherwise-sit-on-sidelines/.

  6. economictimes.indiatimes.com/articleshow/62893800.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst.

  7. We thank a reviewer for offering this suggestion.

  8. We thank a reviewer for this point about criticality of identified factors.

  9. https://www.bain.com/about/media-center/press-releases/2019/m-and-a-report/.

References

  • Adarkar, A., Adil, A., Ernst, D., & Vaish, P. (1997). Emerging market alliances: must they be win-lose? The McKinsey Quarterly, 120–137.

  • Ahuja, G. (2000). Collaboration networks, structural holes, & innovation: A longitudinal study. Administrative Science Quarterly, 45(3), 425–455.

    Google Scholar 

  • Aldrich, H. E., & Fiol, C. M. (1994). Fools rush in? The institutional context of industry creation. Academy of Management Review, 19(4), 645–670.

    Google Scholar 

  • Atsmon, Y., Child, P., Dobbs, R., & Narasimhan, L. (2012). Winning the $30 trillion decathlon: Going for gold in emerging markets. The McKinsey Quarterly, 4, 20–35.

    Google Scholar 

  • Banerjee, S., Prabhu, J. C., & Chandy, R. K. (2015). Indirect learning: How emerging-market firms grow in developed markets. Journal of Marketing, 79(1), 10–28.

    Google Scholar 

  • Barkema, H. G., Bell, J. H., & Pennings, J. M. (1996). Foreign entry, cultural barriers, & learning. Strategic Management Journal, 17(2), 151–166.

    Google Scholar 

  • Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.

    Article  Google Scholar 

  • Beamish, P. (1984). The characteristics of joint ventures in developed and developing countries. Transnational Corporations and Business Strategy, 20, 338.

    Google Scholar 

  • Beamish, P., & Jung, J. C. (2005). The performance and survival of joint ventures with parents of asymmetric size. Management International, 10(1), 19–30.

    Google Scholar 

  • Bello, D. C., Katsikeas, C. S., & Robson, M. J. (2010). Does accommodating a self-serving partner in an international marketing alliance pay off? Journal of Marketing, 74(6), 77–93.

    Google Scholar 

  • Bergen, M., Dutta, S., & Walker, O. C., Jr. (1992). Agency relationships in marketing: a review of the implications and applications of agency and related theories. Journal of Marketing, 56(3), 1–24.

    Google Scholar 

  • Bleeke, J., & Ernst, D. (1991). The way to win in cross-border alliances. Harvard Business Review, 69(6), 127–135.

    Google Scholar 

  • Blodgett, L. L. (1992). Research notes and communications factors in the instability of international joint ventures: an event history analysis. Strategic Management Journal, 13(6), 475–481.

    Google Scholar 

  • Bowman, E. H., & Hurry, D. (1993). Strategy through the option lens: an integrated view of resource investments and the incremental-choice process. Academy of Management Review, 18(4), 760–782.

    Google Scholar 

  • Burgess, S. M., & Steenkamp, J. B. E. (2006). Marketing renaissance: how research in emerging markets advances marketing science and practice. International Journal of Research in Marketing, 23(4), 337–356.

    Google Scholar 

  • Cabral, L., & Pacheco-de-Almeida, G. (2018). Alliance Formation & Firm Value. Management Science. Forthcoming

  • Calantone, R. J., & Zhao, Y. S. (2001). Joint ventures in China: a comparative study of Japanese, Korean, and US partners. Journal of International Marketing, 9(1), 1–23.

    Google Scholar 

  • Cavusgil, S. T., Ghauri, P. N., & Akcal, A. A. (2012). Doing business in emerging markets: entry and negotiation strategies. Thousand Oaks, CA: Sage.

  • Cavusgil, S. T., Deligonul, S., Kardes, I., & Cavusgil, E. (2018). Middle-class consumers in emerging markets: conceptualization, propositions, and implications for international marketers. Journal of International Marketing, 26, 94–108.

    Google Scholar 

  • Challagalla, G., Murtha, B. R., & Jaworski, B. (2014). Marketing doctrine: a principles-based approach to guiding marketing decision making in firms. Journal of Marketing, 78(4), 4–20.

    Google Scholar 

  • Chen, M. J., & Miller, D. (2011). The relational perspective as a business mindset: managerial implications for east and west. Academy of Management Perspectives, 25(3), 6–18.

    Google Scholar 

  • Chen, M. J., & Miller, D. (2012). Competitive dynamics: themes, trends, and a prospective research platform. The Academy of Management Annals, 6(1), 135–210.

    Google Scholar 

  • Chen, M. J., & Miller, D. (2015). Reconceptualizing competitive dynamics: a multidimensional framework. Strategic Management Journal, 36(5), 758–775.

    Google Scholar 

  • Chung, S., Singh, H., & Lee, K. (2000). Complementarity, status similarity & social capital as drivers of alliance formation. Strategic Management Journal, 21(1), 1–22.

    Google Scholar 

  • Crosno, J. L., & Dahlstrom, R. (2008). A meta-analytic review of opportunism in exchange relationships. Journal of the Academy of Marketing Science, 36(2), 191–201.

    Google Scholar 

  • Cui, A. S. (2013). Portfolio dynamics and alliance termination: the contingent role of resource dissimilarity. Journal of Marketing, 77(3), 15–32.

    Google Scholar 

  • Cui, A. S., Calantone, R. J., & Griffith, D. A. (2011). Strategic change & termination of interfirm partnerships. Strategic Management Journal, 32(4), 402–423.

    Google Scholar 

  • Dekimpe, M. G. (2009). From the (new) editor. International Journal of Research in Marketing, 26(4), 259–260.

    Google Scholar 

  • Dussauge, P., Garrette, B., & Mitchell, W. (2000). Learning from competing partners: Outcomes & durations of scale & link alliances in Europe, North America & Asia. Strategic Management Journal, 21(2), 99–126.

    Google Scholar 

  • Eisenhardt, K. M. (1989). Building theories from case study research. Academy of Management Review, 14(4), 532–550.

    Google Scholar 

  • Forbes. (2018). 5 Secrets for breaking into India’s booming market. https://www.forbes.com/sites/startupnationcentral/2018/08/18/5-secrets-for-breaking-into-indias-booming-market/#788658fcb02f. Accessed 19 Feb 2019.

  • Glaser, B. G. (1998). Doing grounded theory: Issues and discussions. Mill Valley: Sociology Press.

    Google Scholar 

  • Gu, Q., & Lu, X. (2014). Unraveling the mechanisms of reputation & alliance formation: a study of venture capital syndication in China. Strategic Management Journal, 35(5), 739–750.

    Google Scholar 

  • Gubbi, S. R., Aulakh, P. S., Ray, S., Sarkar, M. B., & Chittoor, R. (2010). Do international acquisitions by emerging-economy firms create shareholder value? The case of Indian firms. Journal of International Business Studies, 41(3), 397–418.

    Google Scholar 

  • Gulati, R. (1999). Network location & learning: The influence of network resources & firm capabilities on alliance formation. Strategic Management Journal, 20(5), 397–420.

    Google Scholar 

  • Gupta and Wang. (2013). Beat the odds in cross-border joint ventures. https://hbr.org/2013/10/beat-the-odds-in-cross-border-joint-ventures. Accessed 19 Feb 2019.

  • Hagedoorn, J. (1993). Understanding the rationale of strategic technology partnering: Interorganizational modes of cooperation & sectoral differences. Strategic Management Journal, 14(5), 371–385.

    Google Scholar 

  • Hamel, G. (1991). Competition for competence & interpartner learning within international strategic alliances. Strategic Management Journal, 12(S1), 83–103.

    Google Scholar 

  • Hennart, J. F. (1991). The transaction costs theory of joint ventures: an empirical study of Japanese subsidiaries in the United States. Management Science, 37(4), 483–497.

    Google Scholar 

  • Hitt, M. A., Ahlstrom, D., Dacin, M. T., Levitas, E., & Svobodina, L. (2004). The institutional effects on strategic alliance partner selection in transition economies: China vs. Russia. Organization Science, 15(2), 173–185.

    Google Scholar 

  • Homburg, C., Wilczek, H., & Hahn, A. (2014). Looking beyond the horizon: how to approach the customers' customers in business-to-business markets. Journal of Marketing, 78(5), 58–77.

    Google Scholar 

  • Hoskisson, R. E., Eden, L., Lau, C. M., & Wright, M. (2000). Strategy in emerging economies. Academy of Management Journal, 43(3), 249–267.

    Google Scholar 

  • Hunt, S. D. (1976). The nature and scope of marketing. Journal of Marketing, 40(3), 17–28.

    Google Scholar 

  • Hunt, S. D., & Morgan, R. M. (1995). The comparative advantage theory of competition. Journal of Marketing, 59, 1–15.

    Google Scholar 

  • Inkpen, A. C. (2000). Learning through joint ventures: a framework of knowledge acquisition. Journal of Management Studies, 37(7), 1019–1044.

    Google Scholar 

  • Inkpen, A. C., & Beamish, P. W. (1997). Knowledge, bargaining power, and the instability of international joint ventures. Academy of Management Review, 22(1), 177–202.

    Google Scholar 

  • Isobe, T., Makino, S., & Montgomery, D. B. (2000). Resource commitment, entry timing, and market performance of foreign direct investments in emerging economies: The case of Japanese international joint ventures in China. Academy of Management Journal, 43(3), 468–484.

    Google Scholar 

  • Janger, A. R. (1980). Organization of international joint ventures. Report No. 787. New York: The Conference Board, Inc.

  • Jaworski, B. J., & Kohli, A. K. (1993). Market orientation: antecedents and consequences. Journal of Marketing, 57, 53–70.

    Google Scholar 

  • Johnson, J., & Tellis, G. J. (2008). Drivers of success for market entry into China and India. Journal of Marketing, 72(3), 1–13.

    Google Scholar 

  • Kale, P., & Anand, J. (2006). The decline of emerging economy joint ventures: the case of India. California Management Review, 48(3), 62–76.

    Google Scholar 

  • Kale, P., & Singh, H. (2009). Managing strategic alliances: what do we know now, & where do we go from here? The Academy of Management Perspectives, 45–62.

  • Kerin, R. A., Varadarajan, P. R., & Peterson, R. A. (1992). First-mover advantage: a synthesis, conceptual framework, and research propositions. Journal of Marketing, 56, 33–52.

    Google Scholar 

  • Khanna, T., & Palepu, K. G. (1997). Why focused strategies may be wrong for emerging markets. Harvard Business Review, 75(4), 41–51.

    Google Scholar 

  • Killing, J. P. (1982). How to make a global joint venture work. Harvard Business Review, 60(3), 120–127.

    Google Scholar 

  • Kogut, B. (1991). Joint ventures and the option to expand and acquire. Management Science, 37(1), 19–33.

    Google Scholar 

  • Kohli, A. K., & Jaworski, B. J. (1990). Market orientation: the construct, research propositions, and managerial implications. Journal of Marketing, 54, 1–18.

    Google Scholar 

  • Kozlenkova, I. V., Samaha, S. A., & Palmatier, R. W. (2014). Resource-based theory in marketing. Journal of the Academy of Marketing Science, 42(1), 1–21.

    Google Scholar 

  • KPMG. (2014). 2014 High growth markets outlook survey: Capitalizing on the high growth market opportunity. http://www.kpmg.com/us/en/topics/2014-outlook-surveys/pages/2014-high-growth-markets-industry-outlook-survey.aspx. Accessed 19 Feb 2019.

  • Kravets, O., & Sandikci, O. (2014). Competently ordinary: New middle class consumers in the emerging markets. Journal of Marketing, 78(4), 125–140.

    Google Scholar 

  • Kumar, V., Cohen, G. S., & Rajan, B. (2015). Establishing brand equity among business-to-business referral sources in the emerging markets: The case of specialty medical practice. Industrial Marketing Management, 51, 26–34.

    Google Scholar 

  • Kumar, V., Dixit, A., Javalgi, R. R. G., & Dass, M. (2016). Research framework, strategies, and applications of intelligent agent technologies (IATs) in marketing. Journal of the Academy of Marketing Science, 44(1), 24–45.

    Google Scholar 

  • Lambe, C. J., Spekman, R. E., & Hunt, S. D. (2002). Alliance competence, resources, and alliance success: conceptualization, measurement, and initial test. Journal of the Academy of Marketing Science, 30(2), 141–158.

    Google Scholar 

  • Makhija, M. V., & Ganesh, U. (1997). The relationship between control and partner learning in learning-related joint ventures. Organization Science, 8(5), 508–527.

    Google Scholar 

  • Makino, S., & Beamish, P. W. (1998). Performance and survival of joint ventures with non-conventional ownership structures. Journal of International Business Studies, 29(4), 797–818.

    Google Scholar 

  • Makino, S., Chan, C. M., Isobe, T., & Beamish, P. W. (2007). Intended & unintended termination of international joint ventures. Strategic Management Journal, 28(11), 1113–1132.

    Google Scholar 

  • Merchant, H., & Schendel, D. (2000). How do international joint ventures create shareholder value? Strategic Management Journal, 21(7), 723–737.

    Google Scholar 

  • Ministry of Commerce and Industry. (2017) . Consolidated FDI policy. http://dipp.nic.in/sites/default/files/CFPC_2017_FINAL_RELEASED_28.8.17.pdf. Accessed 19 Feb 2019.

  • Nanda, A., & Williamson, P. J. (1995). Use joint ventures to ease the pain of restructuring. Harvard Business Review, 73(6), 119–128.

    Google Scholar 

  • Narasimhan, L., Srinivasan, K., & Sudhir, K. (2015). Marketing science in emerging markets. Marketing Science, 34(4), 473–479.

    Google Scholar 

  • Narayan, V., Rao, V. R., & Sudhir, K. (2015). Early adoption of modern grocery retail in an emerging market: evidence from India. Marketing Science, 34(6), 825–842.

    Google Scholar 

  • Park, S. H., & Russo, M. V. (1996). When competition eclipses cooperation: an event history analysis of joint venture failure. Management Science, 42(6), 875–890.

    Google Scholar 

  • Park, S. H., & Ungson, G. R. (1997). The effect of national culture, organizational complementarity, & economic motivation on joint venture dissolution. Academy of Management Journal, 40(2), 279–307.

    Google Scholar 

  • Parkhe, A. (1991). Interfirm diversity, organizational learning, & longevity in global strategic alliances. Journal of International Business Studies, 22(4), 579–601.

    Google Scholar 

  • Prahalad, C. K., & Mashelkar, R. A. (2010). Innovation’s holy grail. Harvard Business Review. July-August 2010.

  • PwC. (2012). Navigating joint ventures and business alliances. https://www.pwc.com/us/en/transaction-services/publications/assets/pwc-navigating-joint-ventures-and-business-alliances.pdf. Accessed 19 Feb 2019.

  • Reuer, J. (1998). The dynamics & effectiveness of international joint ventures. European Management Journal, 16(2), 160–168.

    Google Scholar 

  • Reuer, J. (2000). Parent firm performance across international joint venture life-cycle stages. Journal of International Business Studies, 31(1), 1–20.

    Google Scholar 

  • Reuer, J., & Miller, K. D. (1997). Agency costs and the performance implications of international joint venture internalization. Strategic Management Journal, 18(6), 425–438.

    Google Scholar 

  • Reuters. (2017). Ford, China's Zotye auto invest $756 million in electric vehcile JV. https://in.reuters.com/article/us-ford-motor-china-electric-vehicle/ford-chinas-zotye-auto-invest-756-million-in-electric-vehicle-jv-idINKBN1D81L4. Accessed 19 Feb 2019.

  • Rindfleisch, A., & Heide, J. B. (1997). Transaction cost analysis: past, present, and future applications. Journal of Marketing, 61, 30–54.

    Google Scholar 

  • Rindfleisch, A., & Moorman, C. (2001). The acquisition and utilization of information in new product alliances: a strength-of-ties perspective. Journal of Marketing, 65(2), 1–18.

    Google Scholar 

  • Roberts, J., Kayande, U., & Srivastava, R. K. (2015). What’s different about emerging markets, and what does it mean for theory and practice? Customer Needs and Solutions, 2(4), 245–250.

    Google Scholar 

  • Rust, R. T., & Cooil, B. (1994). Reliability measures for qualitative data: theory and implications. Journal of Marketing Research, 31, 1–14.

    Google Scholar 

  • Sheth, J. N. (2011). Impact of emerging markets on marketing: rethinking existing perspectives and practices. Journal of Marketing, 75(4), 166–182.

    Google Scholar 

  • Shyam Kumar, M. V. (2005). The value from acquiring and divesting a joint venture: A real options approach. Strategic Management Journal, 26(4), 321–331.

    Google Scholar 

  • Srivastava, R. K., Shervani, T. A., & Fahey, L. (1998). Market-based assets and shareholder value: A framework for analysis. Journal of Marketing, 62(1), 2–18.

  • Stern, I., Dukerich, J. M., & Zajac, E. (2014). Unmixed signals: How reputation & status affect alliance formation. Strategic Management Journal, 35(4), 512–531.

    Google Scholar 

  • Strauss, A., & Corbin, J. (1998). Basics of qualitative research: Procedures and techniques for developing grounded theory. Thousand Oaks, CA: Sage.

  • Swaminathan, V., & Moorman, C. (2009). Marketing alliances, firm networks, and firm value creation. Journal of Marketing, 73(5), 52–69.

    Google Scholar 

  • Tong, T. W., Reuer, J. J., & Peng, M. W. (2008). International joint ventures and the value of growth options. Academy of Management Journal, 51(5), 1014–1029.

    Google Scholar 

  • Tuli, K. R., Kohli, A. K., & Bharadwaj, S. G. (2007). Rethinking customer solutions: From product bundles to relational processes. Journal of Marketing, 71(3), 1–17.

    Google Scholar 

  • UBS. (2017). Canada India partnership project in medical electronics to enure affordable healthcare. http://uniquesys.com/wp-content/uploads/2013/11/New2-UBS-Press-Release-India-Canada-joint-venture-in-medical-electronics-to-ensure-affordable-healthcare.pdf. Accessed 19 Feb. 2019.

  • Varadarajan, P. R., & Cunningham, M. H. (1995). Strategic alliances: a synthesis of conceptual foundations. Journal of the Academy of Marketing Science, 23(4), 282–296.

    Google Scholar 

  • Viswanathan, M., Rosa, J. A., & Ruth, J. A. (2010). Exchanges in marketing systems: the case of subsistence consumer–merchants in Chennai, India. Journal of Marketing, 74(3), 1–17.

    Google Scholar 

  • Wathne, K. H., & Heide, J. B. (2000). Opportunism in interfirm relationships: forms, outcomes, and solutions. Journal of Marketing, 64(4), 36–51.

    Google Scholar 

  • Wei, Y. S., Samiee, S., & Lee, R. P. (2014). The influence of organic organizational cultures, market responsiveness, and product strategy on firm performance in an emerging market. Journal of the Academy of Marketing Science, 42(1), 49–70.

    Google Scholar 

  • Williamson, O. E. (1975). Markets and hierarchies ( pp. 20-30). New York: Free Press.

  • Williamson, O. E. (1993). Opportunism and its critics. Managerial and Decision Economics, 14(2), 97–107.

    Google Scholar 

  • Xia, J., Wang, Y., Lin, Y., Yang, H., & Li, S. (2018). Alliance formation in the midst of market & network: Insights from resource dependence & network perspectives. Journal of Management, 44(5), 1899–1925.

    Google Scholar 

  • Yan, A., & Gray, B. (1994). Bargaining Power, Management Control, & Performance in United States–China Joint Ventures: A Comparative Case Study. Academy of Management Journal, 37(6), 1478–1517.

    Google Scholar 

  • Yan, A., & Zeng, M. (1999). International joint venture instability: a critique of previous research, a reconceptualization, and directions for future research. Journal of International Business Studies, 30(2), 397–414.

    Google Scholar 

Download references

Acknowledgements

This paper is related to the first author’s dissertation. The authors wish to thank the editors, Professor Rajendra Srivastava and Professor V. Kumar; and two anonymous reviewers for their guidance and support throughout the review process, and Professor Rajan Varadarajan and Professor Anna Cui for their comments on an earlier version of this manuscript. The authors appreciate the research assistance provided by Rahul Suhag and acknowledge the generous research support provided by the Indian School of Business, and by the J.B. Hoskins Professorship at the Texas Tech University. The authors also thank Abhirupa Lahiri for copyediting this manuscript.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Mayukh Dass.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rajendra Srivastava and V. Kumar served as special issue guest editors for this article.

Electronic supplementary material

ESM 1

(DOCX 41 kb)

Appendices

Appendix 1

Table 7 Sample description

Appendix 2: Interview Questions

  1. 1.

    Could you share what motivated your organization to form the marketing alliance?

  2. 2.

    What situations are favorable or unfavorable to form a marketing alliance in emerging markets?

  3. 3.

    What abilities, skills and proficiencies influenced you and helped you (the parent firm) to successfully form the marketing alliance?

  4. 4.

    What is the current performance of the marketing alliance? Is it according to the expectation?

  5. 5.

    Do you have a plan for dissolution of this relationship in the future?

  6. 6.

    Can you explain what motivated your organization to dissolve the marketing alliance?

  7. 7.

    What factors related to the external environment affected the marketing alliance dissolution?

  8. 8.

    Apart from environmental factors, what other internal factors caused the marketing alliance dissolution?

  9. 9.

    What was the performance of the marketing alliance when it was dissolved?

Note: The open-ended questions were framed with the motivation-ability-opportunity framework in mind.

Appendix 3

Table 8 Coding examples

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Pedada, K., Arunachalam, S. & Dass, M. A theoretical model of the formation and dissolution of emerging market international marketing alliances. J. of the Acad. Mark. Sci. 48, 826–847 (2020). https://doi.org/10.1007/s11747-019-00641-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11747-019-00641-1

Keywords

Navigation