Alliance Formation in the Automobile Sector during an Era of Ferment

Abstract

When developing radical innovations, firms often form collaborative relationships with external organizations to have access to additional resources. Therefore, alliance formation is influential in innovation and plays a key role in industrial change. However, most studies have not distinguished between individual alliances and instead aggregated collaborations when analysing firm external R&D efforts. Our research sought to explore manufacturer use of alliances to acquire expertise in key knowledge areas as they developed and commercialized electric vehicles. Alliances from 24 manufacturers were analysed according to type (explorative or exploitative), key knowledge area, and firm type (incumbent or start‐up). The results show distinct alliance formation patterns in different key knowledge areas. Heterogeneity of alliance formation in key knowledge areas indicates that developing a radical innovation is not as simple as acquiring new expertise. Rather it is a complex process where firms seek to develop their own knowledge base and use the expertise of other companies. This likely stems from a desire to develop technologies connected to core business models. Analysing alliance formation according to key knowledge area provides a rich account of how firms approach knowledge acquisition as they develop radical innovations during a time of industrial uncertainty.