Linkage between strategic alliances and firmʼs business strategy: the case of semiconductor industry

Abstract

We have investigated the linkage between a firm’s business strategy and its selection of alliance activities. Referring to two economic theories, resource-based theory and social exchange theory, we propose an analytical framework of alliance activities with attention to two factors: “resources to be exchanged” and “partners to exchange such resources”. The alliance matrix is proposed as a tool to analyze strategic alliances, as it depicts the two factors defined above on the two-dimensional axes of the matrix. A firm’s business strategy is categorized according to its growth strategy and propositions are defined to explain how firms undertake strategic alliances for the purpose of executing such business strategies. These propositions have been tested using the empirical data from the semiconductor industry. Our results indicate that firms are trying to utilize strategic alliances in order to execute specific business strategies.