Coming out ahead while losing a partner: the Thoroughbred industry stays on course

Abstract

PurposeIn many industries, firms collaborate as business partners, which helps them achieve superior outcomes and ensure survival in a crisis. Business relationships help companies access limited resources, share information and build trust within the community. This paper aims to highlight the strategies that firms can use to adapt to the loss of a business partner.Design/methodology/approachThis study considers qualitative examples from what happens when a business partner disappears in the Thoroughbred horse industry. The authors draw attention to several types of partner loss due to firm bankruptcy, owner death and strategic restructuring.FindingsThis paper proposes a framework of strategies for surviving the loss of business partners. Specifically, surviving partners may respond by strategic distancing, relationship self-repair or reconfiguration through asset purchases or mimicry by minimizing exit risks.Practical implicationsThe proposed framework can be used by strategists and managers to determine a course of action when faced with the loss of a business partner. Managers can quickly respond to a partner’s exit with the appropriate action to distance their business or stabilize alternate relationships.Originality/valueThe novel framework, informed by examples from the Thoroughbred horse industry, conceptualizes an important theoretical and practical problem. This paper proposes strategies for how businesses react and adapt to survive after losing a business partner.