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Exploration and exploitation alliances in biotechnology: A system of new product development (2004)
| Venue: | Strategic Management Journal |
| Citations: | 162 - 5 self |
BibTeX
@ARTICLE{Rothaermel04explorationand,
author = {Frank T. Rothaermel and David L. Deeds},
title = {Exploration and exploitation alliances in biotechnology: A system of new product development},
journal = {Strategic Management Journal},
year = {2004},
pages = {201--221}
}
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Abstract
We link the exploration–exploitation framework of organizational learning to a technology venture’s strategic alliances and argue that the causal relationship between the venture’s alliances and its new product development depends on the type of the alliance. In particular, we propose a product development path beginning with exploration alliances predicting products in development, which in turn predict exploitation alliances, and that concludes with exploitation alliances leading to products on the market. Moreover, we argue that this integrated product development path is moderated negatively by firm size. As a technology venture grows, it tends to withdraw from this product development path to discover, develop, and commercialize promising projects through vertical integration. We test our model on a sample of 325 biotechnology firms that entered 2565 alliances over a 25-year period. We find broad support for the hypothesized product development system and the moderating effect of firm size. Copyright © 2004 John Wiley & Sons, Ltd. Strategic alliances are a ubiquitous phenomenon, especially in high-technology industries (Hagedoorn, 1993). Parallel to the rise in interfirm cooperation, research on strategic alliances has burgeoned, with one strand focusing on the performance impact of alliances on the focal firm (Gulati, 1998). In this line of inquiry, several scholars have studied the relationship between a firm’s strategic alliances and its innovative performance or new product development (Shan, Walker, and
Keyphrases
new product development exploitation alliance strategic alliance product development path technology venture firm size turn predict exploitation alliance exploration exploitation framework promising project causal relationship high-technology industry interfirm cooperation venture alliance john wiley son 25-year period biotechnology firm firm strategic alliance focal firm hypothesized product development system several scholar exploration alliance broad support integrated product development path innovative performance organizational learning ubiquitous phenomenon vertical integration performance impact
