GSM Lecture 8

Management > Global Strategic Management > Globalisation > Alliances > R&D alliances

R&D alliances

There are two causes of traditional alliances:

• Market access and opportunities

• Innovation processes, which can result in risk reduction, reducing the innovation time span, increase access to markets or technology, improve economies of scale and strengthen blocks against competition

R&D is different, as it is more strategically important. R&D alliances tend to be more short-term, project-specific and informal. Supply conditions are important for the influence of or location of this type of alliance, whereas trade barriers are not an issue.

There has been so much interest in R&D alliances, as globalisation has limited influence, whereas knowledge is ever-growing and a successful R&D alliance can lower costs for the whole company.

Differences between other R&D and other alliances

Asset-exploiting activities have a broader choice of mode, although M&A is often not possible and greenfield investment is very slow.

In other cases technology is sought as part of a portfolio (multi-competence firm), but the markets for technologies is difficult to find, due to market failure. In addition, hierarchical failure can occur, as the context-specific nature of R&D makes quasi-external sources easier in some instances.

Substitutability of external and internal sources?

Core competences

Reasons

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