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By Francis Bidault (auth.)

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Extra info for Managing Joint Innovation: How to balance trust and control in strategic alliances

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Earlier on we defined alliances as being either exploitative or explorative. 15 Co-development alliances would definitely be of the explorative type. 3) Co-development alliances are therefore specified as partnerships that involve joint contributions to the development of new capabilities. They differ from other forms of alliances on both dimensions. Retail franchising is not intended to help in the development of a franchisor’s capabilities, but rather to have the franchisee exploit its commercial capability and expand its market reach.

Financial performance and duration, for instance, may seem like objective measures of success. But partners are not necessarily interested in a long or profitable joint venture. It is possible that they know the partnership will make a financial loss but will also produce valuable knowledge of a technology or a market, which they can exploit Cooperation casualty separately later on. In other words, alliance success can mean a variety of outcomes such as learning, experience, acquisition of new capabilities, and so on.

Such is the business model of MAN Diesel & Turbo in the two-stroke marine engine market. MAN provides technological know-how and assistance to a large number of licensees who are primarily located in Asia (where the shipbuilding industry has migrated in the past few decades16 ). The function of licensees is to sell and build marine engines 30 Managing joint innovation for large ships based on the know-how, intellectual property, processes, and reputation of MAN. But MAN Diesel & Turbo (which used to manufacture marine engines) is no longer involved in this business and focuses instead on its role as a technology provider and on the supply of a few key components.

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