The role of alliance market orientation and alliance competence in new product development performance

Date

2009-05

Journal Title

Journal ISSN

Volume Title

Publisher

Texas Tech University

Abstract

This dissertation seeks to enhance understanding of successful inter-organizational innovation activities by developing and testing a new theory framework for explaining the role of alliance market orientation and alliance competence in the context of alliance’s new product development (NPD) processes. Drawing on resource-based theory, competence-based theory and, particularly, R-A theory, this dissertation investigates how alliance market orientation and joint alliance competences of partnering firms help them gain strategic advantages over competing dyads.

The main contribution of this study is to define alliance market orientation, develop a measure for it, and test its role in the context of inter-organizational NPD performance. This dissertation defines alliance market orientation as a capability that enables an alliance (1) to jointly and systematically gather market intelligence (from competitor analyses, studies of customer needs/preferences, and studies of the factors that influence competitors’ and customers’ behaviors), (2) to inter-organizationally coordinate and disseminate the knowledge gleaned from the market intelligence gathered, and (3) to efficiently and effectively respond to the knowledge that is coordinated and disseminated. Although the concept of inter-organizational market orientation has been discussed in the marketing literature previously, it has been the focus of little conceptual development and no empirical research. Given the increasing number of NPD alliances in recent years and their high failure rates, it is important that we understand the role of alliance market orientation in inter-organizational NPD activities.

A conceptual framework involving potential antecedents -- joint alliance competence, goal congruence, complementary resources, trust and commitment -- is hypothesized to lead to alliance market orientation. It is also hypothesized that alliance market orientation as a key mediating variable lead to new product outcomes. Based on R-A theory, alliance market orientation is conceptualized as an idiosyncratic resource in this dissertation. Therefore, it provides a strong ground for alliances’ sustainable competitive advantage in some market segments and eventually improves their new product performances. As another central variable in the model, alliance competence is postulated as it is led by top management support. Alliance competence is also hypothesized to influence goal congruence and complementary resources of alliances. The process is examined via cross-sectional online-survey methodology. A total of 253 firms involved in dyadic new product alliances in various high-tech industries participated in the study. Structural equation modeling techniques were used to test the proposed model. The empirical results point to the importance of alliance market orientation as a key mediating variable to alliances’ new product performance. Joint alliance competence, goal congruence, trust, and commitment lead to alliance new product outcomes only through alliance market orientation. This study also found that top management support plays an important role in building and maintaining firms’ alliance competences. Among the antecedents of alliance market orientation, joint alliance competence is found to be the most influential one. It means that in order for alliances to develop market orientation as a relationship property, joint alliance competence seems to be the prerequisite. Finally, this study found that new product novelty and new product meaningfulness are equally important in new product performances of alliances. While the generalization of the empirical results may be limited for several reasons, they nevertheless yield significant theoretical and managerial implications for marketing strategy.

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Keywords

Alliance market orientation, Alliance competence, Innovation, New product

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