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Co‐evolution of exploration‐exploitation strategy and weak‐strong ties portfolios: A longitudinal case study
Author(s) -
Wu Jiebing,
Wang Xiaoyan,
Guo Bin
Publication year - 2018
Publication title -
european management review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.784
H-Index - 32
eISSN - 1740-4762
pISSN - 1740-4754
DOI - 10.1111/emre.12297
Subject(s) - alliance , portfolio , profitability index , process (computing) , business , industrial organization , project portfolio management , marketing , economics , management , computer science , finance , project management , political science , law , operating system
This paper explores the interactive relationship between exploration‐exploitation strategy and alliance portfolios evolution, through examining underlying motivations of the evolution of alliance portfolios along with firm strategy change. Based on a 20‐year longitudinal case analysis on a leading Chinese pharmaceutical manufacturer, we establish a three‐stage process model: (1) stage 1: under turbulent environment and with the consequent reduction in profitability, the firm implements exploration strategy and forms weak alliance portfolio; (2) stage 2: the firm transforms its strategy from exploration to exploitation and forms strong alliance portfolio; and (3) stage 3: as this single business firm transforms into a multibusiness firm, it tends to make a balance between exploration and exploitation strategy and form weak‐strong alliance portfolio. Based on this process model, this study reveals the diverse motivations of alliance portfolios evolution along with firm strategy change, the interplay mechanisms between exploration‐exploitation strategy and weak‐strong ties portfolios, and the portfolio effects across businesses within a firm.