Open AccessThe Impact of Horizontal Strategic Alliances On The U.S. Steel Industry
Author(s) -
Lucy Ojode
Publication year - 1970
Publication title -
journal of business strategies
Language(s) - English
Resource type - Journals
eISSN - 2162-6901
pISSN - 0887-2058
DOI - 10.54155/jbs.21.2.149-178
Subject(s) - profitability index , competition (biology) , industrial organization , business , horizontal and vertical , popularity , marketing , ecology , geodesy , finance , biology , geography , psychology , social psychology
Despite the popularity of strategic alliances among firms, the public is ambivalentabout the industry impact of horizontal alliances. It is not apparent that thebenefits of alliances to the firm also accrue to the industry. This paper examinedthe U.S. steel industry data from 1977 to 1997 to determine the potential impactsof capability horizontal alliances on industry competitive structure. The resultsare indicative of positive impacts on industry competitiveness (profitability andproductivity) and competitive structure (price competition and declining industryconcentration). A capability hypothesis is offered that posit that horizontal alliancesthat enhance partner firms' capabilities may diffuse critical capabilitiesor 'best practices' within an industry thereby raising the average level of competitivenessin the industry and inducing competitive pressures that can resultin price competition and erode industry concentration.