Collaborative New Product Alliances: A Review of the Literature and Research Perspectives

• Author: Teck‐Yong Eng,Jun Li,Christiane Prange
• Date: 01 July 2015
• DOI: http://doi.org/10.1002/jsc.2015
• Published date: 01 July 2015

RESEARCH ARTICLE

Strat. Change 24: 351–371 (2015)

Published online in Wiley Online Library

(wileyonlinelibrary.com) DOI: 10.1002/jsc.2015

Copyright © 2015 John Wiley & Sons, Ltd.

Strategic Change: Briengs in Entrepreneurial Finance

Strategic Change

DOI: 10.1002/jsc.2015

Collaborative New Product Alliances: A Review of the

Literature and Research Perspectives1

Christiane Prange

EMLYON, Business School, France

Teck-Yong Eng

University of Southampton, UK

Jun Li

Essex Business School, University of Essex, UK

Alliance and NPD evolve in a dynamic and interrelated manner so that the

management of collaborative NPD alliances becomes the management of an

evolving cycle of two interrelated process loops.

New product development (NPD) is vital for every rm, which is amply illustrated

by the fact that nearly 60% of a rm’s average revenues in high-tech and pharma-

ceutical industries result from products that are younger than three years (Breiner,

2006). Indeed, a rm’s choice of its product strategy is perhaps one of its most

critical decisions (Simmonds, 1968), but high failure rates of NPD also make it

a very risky undertaking (Karakaya and Kobu, 1994). at is why several research-

ers have recommended a collaborative alliance-based approach to NPD activities

(Rindeisch and Moorman, 2001; Sivadas and Dwyer, 2000), where partners

mutually access and absorb complex resources to ultimately improve their product

development and commercialization outcomes, while sharing both risks and costs

(Linnarson, 2005; Sobrero and Roberts, 2001).

NPD alliances can be described as any formal or informal collaborative

arrangements related to the joint development and commercialization of new

products (Link and Bauer, 1989). ese involve horizontal alliances in terms of

the opportunity for exploration (Bessant et al., 2005; Rindeisch and Moorman,

2001), as well as related diversication or eciency gains from vertical alliances

(Datta and Puia, 1995; Dussauge et al., 2000). Despite the pertinence of the

issue, relatively little cumulative work has been undertaken with an explicit focus

on managing the inter-organizational NPD process. For example, Emden and

Droege (2006) identied only about a dozen studies since 1960 dealing directly

1 JEL classication codes: D01, D74, L24, L25, O32.

Collaborative NPD alliances

evolving around the ‘outer cycle’

of alliance management and the

‘inner cycle’ of new product

development present a challenge

of managing the dual logic of

both partnering and innovation.

The dual need for flexibility and

stability in NPD alliances is

reflected in changing governance

needs and ongoing alliance and

new product learning.

Managing variables and

governance choices unique at the

critical intersection points of two

cycles is of importance in

determining the continuance of

the alliance and the success of

the NPD project.

352 Christiane Prange, Teck-Yong Eng, and Jun Li

Copyright © 2015 John Wiley & Sons, Ltd. Strategic Change

DOI: 10.1002/jsc

early 1990s. We complemented our review with studies

on alliances and NPD processes that each contribute

separately to the management of collaborative eorts.

Further, we suggest that the current research could be

enriched by combining and adopting ideas from evolu-

tionary alliance research (Ariño and de la Torre, 1998;

Bell et al., 2006; Das and Teng, 2002; Rao and Reddy,

1995; Seung Ho and Russo, 1996) and organizational

ambidexterity theory (Cao et al., 2009; March, 1991;

Raisch and Birkinshaw, 2008; Simsek, 2009). Evolution-

ary alliance theory better helps to conceptualize the NPD

process as consisting of a dynamic process with intersec-

tion points where rms need to prioritize either NPD or

the continuance of the alliance. In turn, ambidexterity

theory oers suggestions as to how the two processes

could best be combined.

e envisaged contributions of this article are as

follows. First, to our knowledge, it is among the rst to

systematically review existing research on NPD alliances.

Second, we extend the literature by developing a model

that rigorously links the two processes in an iterative two-

cycle model and we use this model to structure our review

and detect research gaps. ird, we identify NPD-related

management challenges and suggest further avenues for

research.

Methods and overview

We undertake a systematic review, which tries to uncover

the key scientic contributions on NPD alliances (see Tran-

eld et al., 2003 for a previous contribution). In doing so,

we are adding transparency and eliminating bias compared

with more traditional narrative reviews, which remain nec-

essarily subjective (Pittaway and Cope, 2007). As our review

centers on the strategic focus of NPD alliances, we concen-

trate on the organizational level and ignore project- or

individual-based NPD collaboration. is focus seems jus-

tied, since managerial issues are fundamentally concerned

with how rms achieve competitive advantage (Nag et al.,

2007) and how NPD alliances may help in this respect.

with NPD alliances and focusing on partner selection

issues. Consequently, the authors noted that the ‘develop-

ment of an emergent theory addressing key co-development

issues is overdue’ (p. 332). Since then several studies have

emerged, which adopt a broader view on NPD manage-

ment (e.g., Fang, 2011; Lambe et al., 2009; Lee and

Johnson, 2010), although a cumulative and integrative

treatment is still missing. Such a review that identies

the challenges and pitfalls of NPD alliances is much

needed to advance theory development, especially as col-

laborative NPD arrangements are notoriously dicult to

manage.

While rms with NPD alliances show superior inno-

vative and nancial performance compared with internal

NPD (Gawer and Cusumano, 2002), inter-rm collabo-

rations accrue many additional risks. Like other collabo-

rative engagements, NPD alliances often need to

overcome obstacles of diverging cultures, inconsistent

behaviors, dierential resource endowments, and some-

times high competitive overlap (Yan and Luo, 2001).

Reports further indicate that NPD alliances frequently

result in outcomes that diverge widely from initial expec-

tations (Das and Teng, 2000; Inkpen and Beamish,

1997), both with respect to alliance and innovation

success, and that experience helps to overcome some of

the obstacles of rst-time alliances (Kale et al., 2001;

Pangarkar, 2009).

Strikingly, the literature on alliance management and

new product collaboration has tended to be distinctly

separate, with the former focusing on the management of

successful alliances and the latter concentrating on the

dynamics of innovation in the NPD process (Bidault and

Cummings, 1994).

In this article, we review the extant literature. As a

conceptual framework integrating alliance and NPD has

been missing so far, we suggest a new approach of two

interrelated cycles of alliance and NPD management to

structure the literature review. We identied 48 studies

that focus on NPD alliances, published in top journals

of the Financial Times 45-journal list (2012) since the