Value creation and appropriation in asymmetric alliances: the case of tech startups

Abstract

This study of asymmetric supplier-customer alliances examines how different tensions and dimensions within the alliance shape value creation and value appropriation. This question would appear to be fundamental-as for many startups, successful launch and growth hinge on the ability to build lasting alliances with key industry players. The authors use resource dependence theory to carry out an analysis of two polar cases-one success story, one failure-involving tech startups and large customers. By analyzing the elements that impact value creation and value appropriation, we contribute to identifying: (1) the sources of asymmetry in vertical alliances-relative supplier-customer characteristics (2) two conditions of success when it comes to overcoming the tensions and problems brought about by asymmetries-learning with large customers and customer-specific investments and (3) positive resultsdual value appropriation when the conditions for alliance success are properly implemented. In this paper, we shed light on this novel concept of dual value appropriation-where both firms aim for superior joint value creation as the basis for their own competitiveness. Startup and customer firms may fully appropriate jointly generated value, in a relationship of symbiotic interdependence. We discuss the implications of these findings and compare them with existing resource dependence studies which delve into the subject of asymmetries. It should be noted that this research considers points of view from both supplier and customer sides of the alliance.

If You Want to Go Fast, Go Alone; If You Want to Go Far, Go Together. In Favor of a Partnership Approach to Directors of Incubators’ Dynamic Managerial Capabilities

“…Strategic management concepts are used to provide details of these transformations. The strategies studied aim to respond to the specific needs of entrepreneurs, which goes hand in hand with the brutal diversification seen in their profiles (Boissin et al, 2009;Cambra Fierro & Pérez, 2018). These strategies particularly involve specialization (Vanderstraeten & Matthyssens, 2012) or customization (Vanderstraeten et al, 2016).…”

Buyer-supplier relationships in startups : An analysis of factors that drive startup attractiveness to suppliers

“…Moreover, startups may need suppliers for high-quality prototypes and components to bring their products not to do business with them (Bolumole et al, 2015). All in all, startups can be faced with a range of obstacles when dealing with suppliers -difficulty sourcing from high-quality suppliers (Ghosh et al, 2019), encountering opportunistic supplier behavior (Rottenburger and Kaufmann, 2020), facing power asymmetries (Perez and Fierro, 2018), and being subjected to undesirable exclusivity agreements (Garnsey and Wilkinson, 1994). To overcome these challenges, startups need to enhance their attractiveness to suppliers and achieve preferred customer status if they are to mobilize the supplier resources they need for success.…”

“…Startups could evaluate the strategic fit between the startup and the large firm when finding suppliers for startups. Startups are smaller and have fewer resources than large companies (Perez and Fierro, 2018). Therefore, startups need to consider the implications of power dynamics in the startup-supplier relationships to address the potential challenges that may arise, such as power asymmetries (Perez and Fierro, 2018) and potential opportunistic supplier behavior (Rottenburger and Kaufmann, 2020).…”

“…Startups are smaller and have fewer resources than large companies (Perez and Fierro, 2018). Therefore, startups need to consider the implications of power dynamics in the startup-supplier relationships to address the potential challenges that may arise, such as power asymmetries (Perez and Fierro, 2018) and potential opportunistic supplier behavior (Rottenburger and Kaufmann, 2020). These potential challenges can result from selecting suppliers for startups who do not share future goals and the direction planned.…”

“…However, startups should choose a suitable governance model when they collaborate with large companies. This is because there are asymmetries (resources, long-term objectives, organization and structure, power, and communication) between startups and large companies that can create problems (Garnsey and Wilkinson, 1994;Perez and Fierro, 2018). Consequently, a startup could end up with a smaller and disproportionate share of the value created by the alliance (Perez and Fierro, 2018) or large suppliers could force startups into an exclusivity agreement, limiting supplier options and harming startup competitiveness (Garnsey and Wilkinson, 1994).…”