Innovating through alliances: expectations and limitations

Abstract

In this paper we have analysed the innovation processes occurring in several crossindustry technology partnerships in order to suggest some key managerial issues pertaining to the effectiveness of these increasingly popular initiatives. Our general proposition, based on an extensive literature review and clinical research, is that the managerial hurdles in partnerships frequently offset, and in some cases eliminate, the expected innovation advantages. We submit that there is a fundamental tension between the dynamics of innovation and the logic of partnering. The extent of the tension, however, depends on the nature of the innovation project and on the characteristics of the partnership. Thus we recommend that managers involved in the formation of joint-R&D agreements should carry out an innovation-partnering assessment to design an appropriate management structure that would minimise the 'tension'. Lastly, we suggest some ingredients for carrying out such an assessment, and directions for further research.

Radical innovation in strategic partnerships: A framework for analysis

“…Partners feel more confident about the intentions of each other, more willingly cooperate and readily invest in the relationship. Continuous investment flow ensures sufficient financing and allows for more flexibility in the directions of research, when responding to the unforeseen changes and hazards of experimentations (Bidault & Cummings 1994, March 1991. A greater transparency over the research stages promoted by the strong administrative system allows for a more accurate assessment of the performance and prompt withdrawal in the case of accumulating losses.…”

“…Added to that, costs of projects performed across organizational borders are more difficult to control in comparison to those executed internally. Not surprisingly, the overall expenses of collaborative projects tend to be higher, than those for in-house developments (Bidault & Cummings 1994). To realize their value creation potential, radical innovation alliances require partners to prepare themselves to commit substantial resources with long-term outlook, in the absence of immediate returns and under the pressure of high uncertainties.…”

“…Leonard-Bart (1992) analyzes the paradox of core capabilities and core rigidities in innovation management. Bidault & Cummings (1994) and Ritala & Hurmelinna-Laukkanen (2012) both refer to the cooperation and competition trends co-existing and influencing firm innovation.…”

Democratizing the New Product Development Process: A New Dimension of Value Creation and Marketing Concept

“…There exists no definite relationship between the level of user participation and the success of a project (Leonard-Barton, 1995;Bidault and Cummings, 1994). Ogawa and Piller (2006) argue that with exception of Procter and Gamble (P&G) and Unilever, consumer products in the Fast Moving Consumer Goods (FMCG) industries rarely involve customers in the stages of product development on accounts that consumers are very difficult to predict.…”

New product development

“…A number of studies attempt to describe the management of seller-buyer interactions during new product development (Biemans, 1991(Biemans, , 1992Hutt et al, 2000;Bruce et al, 1995;Athaide and Stump, 1999;Bidault and Cummings, 1994;Mohr and Spekman, 1996;Johnsen and Ford, 2000). The research studies are primarily classified as prescriptive/normative and conceptual/empirical in Table 2.…”