Horizontal alliances as an alternative to autonomous production: product expansion mode choice in the worldwide aircraft industry 1945–2000

Abstract

International audienceThis study investigates why firms choose to undertake product expansion through alliances with competitors rather than on their own. We highlight product heterogeneity as a determinant of this make or ally choice. We propose that firms turn to horizontal alliances in order to implement product expansion projects that require greater resources than those available to them. More precisely, we hypothesize that a firm is more likely to launch a new product through a horizontal alliance rather than autonomously when the resource requirements of the project are greater, the resources available to the firm are more limited, there is a mismatch between resource endowment and requirement, and the firm's collaborative competence allows it to better cope with the interorganizational concerns that collaboration with competitors raises. We find support for our arguments on a sample of 310 new aircraft developments launched between 1945 and 2000, either by a single prime contractor or as a horizontal alliance in which prime contractorship is shared with another industry incumben

The Virtues of the Vice of Cooperation between Rival Firms: A Simulation Model to Evaluate the Performance of Coopetition Strategy in the Grain Merchant Industry

“…In order to enter new markets, firms often need to share costs and risks. In this case, competitors are particularly likely have the necessary supplementary and complementary resources (Das and Teng, 2000;Garrette et al, 2009). Furthermore, in such cases, competitors often share a willingness to decrease risks and costs, and sharing resources and information for such purposes is efficient.…”

“…The coopetition phenomenon has been observed in the cinema sector , ICT (Dittrich and Duysters, 2007;Gueguen, 2009), the canning industry (Le Roy, 2008), air transport (Garrette et al, 2009), healthcare (Barretta, 2008;LeTourneau, 2004;Peng and Bourne, 2009), R&D consortia (Browning et al, 1995;Gnyawali and Park, 2011) and the automotive industry (Gwynne, 2009;Segrestin, 2005). In those papers there is evidence that coopetition is chosen by managers to foster greater knowledge development, economic and market growth, and technological progress of their firm.…”

“…Qualitative and theoretical analyses corroborate this finding and indicate that allying competition and cooperation could be considered potentially superior because it enables the benefits of both competition and cooperation to be reached (Nalebuff and Brandenburger, 1996;Lado et al 1997). The literature on strategic alliances argues, via a resource-based view, that the sharing of similar resources, in particular to spread the risks and costs involved in activities such as technology development and standardization, enables firms to reach a critical mass, and thereby to gain economies of scale (Das and Teng, 2000 ;Garrette et al, 2009). Apart from qualitative research, much of the existing evidence was obtained through research conducted on the level of dyadic alliances focusing on individual benefits (Kim and Parkhe, 2009) rather than the inter-organizational level and benefits to industry.…”

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“…It is reasoned that the quest for market power through increased market concentration and the need for complementary resources controlled by adversaries are possible reasons behind alliance formation between rivals (Garrette, Castañer, & Dussauge, 2009;Khanna, Gulati, & Nohria, 1998;Silverman & Baum, 2002). This reasoning, nonetheless, is generic to all businesses and industries, whether global or otherwise.…”