Complementary alliances Sample Clauses

Complementary alliances. In complementary alliances, the parties contribute different assets or skills so as to take advantage of each of their separate resource pools. Generally they involve the marketing and distribution of an existing product, manufactured by one party that intends to penetrate a new market. Another party to the alliance provides its distribution network or market experience in an attempt to extend the product portfolio of the firm seeking assistance. Within complementary alliances, according to the division of particular tasks, we can distinguish, on the one hand, alliances that facilitate developing capabilities originally contributed by the other partner and, on the other hand, alliances that have no influence on the partners. In the case of the former, alliances often end with one partner taking over the joint business alone or creating its own capability. As a result of the enhanced learning process, the initial complementarity of the parties’ capabilities begins to disappear over time.36 Undertakings party to complementary alliances are usually of different sizes, at least on the market where they cooperate. Complementary alliances generally increase competition; in the long run, the self-supporting entry on the partner’s market is possible.