Recognizing Patterns: Two Alliance Portfoliobuilding Styles

This chapter explores two alliance portfolio-building styles based on pattern recognition. Firms develop habits or, more precisely, patterns that help simplify the decision making process. When a firm forms relationships with a particular partner, it will continue forming relationships with this partner in the future. Similarly, once a firm learns how to build an alliance portfolio of a particular kind, it will continue in that pattern. Such partnering patterns then form the firm's alliance portfolio-building style: its consistent pattern of alliance formation over time. Emerging market firms and developed market firms live in diverse environments. As a result, they develop different alliance portfolio-building styles and use alliances differently. Changing the firm's portfolio configuration is a major operation as it means altering or replacing fundamental partnering patterns within the firm.