International alliances: Why now?

Conclusion

Varadarajan and Cunningham (1995) suggest several items for further research, including “Why are strategic alliances more pervasive in some industries relative to others?” (p. 294) and “Which objectives are best pursued using an alliance strategy?” (p. 295). The speculations offered here suggest that such research can be more deeply grounded in the industry structure. For example, one can suggest that the competitive intensity and the degree to which markets are global will help explain why ISAs in distribution and manufacturing are formed. It is also possible to advance the hypothesis that where the objectives of the alliances revolve around R&D, the speed of new product introductions will predict an increasing reliance on ISAs.

The main proposition emerging out of the theoretical speculation is that international SAs in R&D have arisen because unique and protected technological know-how is a thing of the past. No firm in a competitive industry can any longer expect to be alone with a unique technological capability. Thus there is no reason to avoid collaborating with “the enemy,” the competitors. The second proposition is that some firms need to be in multiple markets and products to compete effectively and that alliances are an efficient way to leverage scarce resources. Distribution and manufacturing ISAs are organizational consequences of lean manufacturing and re-engineering.