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Master thesis defence

The effects of strategic alliances on pioneering technologies

Armand Pennenburg

on 21 September 2012

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Transcript of Master thesis defence

Contribution Innovation and external sourcing continuous innovation dynamically continuous innovation discontinuous evolutionary innovation innovation revolutionary incremental radical minor/major change new to the firm new to the market costs performance replacing new market Invention refers to the development
of a new idea or an act of creation;

innovation refers to the commercializing
of the invention Invention Pioneering technology variety new tech superior resources corporate renewal and acquisitions Strategic alliance Mergers Firm size
Technological distance
Region 1st step Finished 2nd step Last step (Hitt, et al. 1993; Schumpeter, 1934) Alliances with have a
on pioneering innovations No entry costs, niche markets
Competitive markets
Innovative environments
Manufacturing industry
Strategy to be innovative High barriers, monopolistic markets
R&D grows proportionally (up to a point)
Better at learning and imitating
(manufacturing and distribution advantages)
Size advantages Internal knowledge
(larger, diverse)
Financial resources
Sales base
Market power LARGE firms small firms between the focal firm and its partners the effect of alliances on the creation of pioneering technologies Absence of overlapping knowledge Perceive, interpret
and evaluate information Some overlap always necessary
to recognize and assimilate
new knowledge more novel knowledge pioneering technologies Exploration requires
a loosening of linkages
with large cognitive distance Learn distantly related skills
and to be exposed to
distant knowledge means more Alliances with partners of the technologies’ industry have a effect on the pioneering technologies than partners within the same industry. Strategic alliances from the have a
effect on pioneering technologies than alliances from different regions more positive same region outside more positive strengthens Technological distance small firms positive effect Complement each other’s strengths and weaknesses
Major innovation is often viewed as disruptive to established investments (conservatism) Successful product innovations
frequently were revolutionary and
originating from outside the industry Japanese and Europeans are more culturally familiar to shared enterprises All firms would rather have a partner of their own nationality Cultural incompatibility and lack of trust can produce enormous difficulties

Compatibility between partners with a common set of values, style, and culture Many U.S. managers still regard cooperation with skepticism and suspicion SOPHISTICATED OUTSOURCING ARRANGEMENTS Sample of 78 firms active in the pharmaceutical industry
Technology alliances and (financial) information
Sources: MERIT-CATI databank and Thomson ONE

Dependant variable:
Pioneering technologies
9.49 pioneering patents per year (sd = 16.00)

Independent variables:
Size in Sales
Technological distance
Industry in SIC codes
Region either America, Europe or Asia

Control variables
R&D intensity (absorptive capacity)
in R&D expenditure
Technological depreciation Hypothesis 1 Hypothesis 2 Hypothesis 3b Hypothesis 3a H1: Size

H2: Technological distance

H3: Same industry

H4: Same region Predicted




+ Results




Insignificant * Discussion Ambiguity in other studies
Acs and Audretsch (1988)
Ettlie and Rubenstein (1987)
Scherer (1980) alone has a significant moderating effect Conflicts &
barriers Technology transfer External factors Communication Public funding
Knowledge centers
Market conditions Absorptive capacity
Inbound technology transfer
Ability to recognize, assimilate and
apply external knowledge

Desorptive capacity
Outbound technology transfer
Ability to identify technology opportunities
and facilitate the technology’s application

Coupled process
Co-creation with complementary partners Path dependant Divergent objectives
Operational asymmetries
Strategic, cultural, technical barriers 1. Dramatic increase in the speed of communication.
2. Dramatic reduction in the costs of communication
3. Sharp rise in communication bandwidth
4. Vastly expanded connectivity
5. Integration of communication with computing technologies in globalization of innovation:
Innovation increasingly dependent on international network relations
Shift to network relations between actors embedded in particular regional innovation systems Results raise more questions
Leading edge technology
> pioneering technologies
E.g. emerging technologies
No exploitation taken into account
(no knowledge centers)
Subsequent actions not included
Data: diversify industries Limitations &
future research Managerial implications
& recommendations
Different effects in different situations
Entry costs are low and niche markets
Smaller firms
are more flexible
e.g. proximity to universities
provide new technologies Absorptive, desorptive capacities
and coupled process Contribution Deeper understanding of the moderating effects on sourcing technology externally
Light shed on specific use of alliances in exploration
Deepen and extend work
Open a door, as it is still ambiguous Trend Region Industry Technological distance Size Size Not in the same region Same industry Size
Existent knowledge base
and competence pool Enhanced communication and
information flows Questions?
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