Innovation Management and

New Product Development

6th edition

Chapter 8
Strategic alliances and
networks

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Silicon valley – the best example
of an innovation network.

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 8.2
The tangled web of alliances between
car manufacturers

Source: FT.com, 4 May 2010.

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.1
Assembling the component parts to
make an iPhone

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.2
Reasons for entering a strategic alliance

Sources: Littler, D. A. (1993) ‘Roles and rewards of collaboration’, in Tidd, J., Besant, J. and Pault, K. (eds) (2001) Managing Innovation, Wiley, Chichester, p. 51; Chan, P.S. and Heide,
D. (1993) Strategic alliances in technology: key competitive weapon, Advanced Management Journal, vol. 58, no. 4, 9–18; Harney, A. (2001) Ambitious expansion loses its shine:
analysts change their tune about Sony’s dreams and begin to count the costs of the new mobile phone alliance with Ericsson, Financial Times, 2 October; Budden, R. (2003) Sony-
Ericsson seeks success with new phones, FT.com, 3 March.

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 8.3
The process of forming a strategic
alliance

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.3
Types of trust

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.4
Main risks identified in the literature

Source: Adapted from Quélin, B. and Duhamel, F. (2003) Bringing together strategic outsourcing and corporate strategy: outsourcing motives and risks, European Management Journal,
Vol. 21, No. 5, 647–61.

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
 Eating you alive from the toes up
Firms have turned to outsourcing in an attempt to deliver
improved profits.
This began with outsourcing periphery activities.
Outsourcing to China and India was attractive because of the low
labour costs.

Even the R&D and NPD firms use outside for help to:
• obtain additional expertise;
• put together additional resources;
• reduce development costs;
• reduce time to market;
• develop new areas of competencies.

The outsourcing firm has slowly eaten the client firm from the
toes up, and finally consumed it.
Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 8.4
Prisoner’s dilemma

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Figure 8.5
The repeated game

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.5
DVD performance details

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.6
Studios supporting HD DVD and Blu-ray

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved
Table 8.7
Interlinkages and networks between
firms

Copyright © 2018, 2013, 2008 Pearson Education, Inc. All Rights Reserved