Why Go it Alone? - Alliances as Innovation Accelerators

The emergence of a new, third generation of cellular phones (3G) has led to unprecedented levels of collaboration within the global mobile industry, transcending both international borders and traditional industry boundaries. A notable feature of this wave of collaboration is the use of alliances to accelerate the development pace of new 3G ventures and to improve their chances of success on a global scale, within a highly uncertain environment. In this working paper, professor Peter Williamson and Sarah Meegan review the varying aspects of alliances, and show their specific role in the development of NTT DoCoMo’s i-mode.

by Peter Williamson, Sarah Meegan
Last Updated: 23 Jul 2013

In 2002, INSEAD Professors Yves Doz and Peter Williamson proposed a conceptual framework to explain how strategic alliances can act as innovation accelerators, and offered a means to analyse the potential opportunities and pitfalls of using alliances. They concluded that alliances have four main facets:

The need for different types of partners and alliance management processes at each stage of the entrepreneurial cycle – from the inception of the idea, through experiments and testing, establishing an actual venture in the market, to a final stage of business growth and scale-up.

The need to shift from co-discovery at the early stages, through co-learning, co-option, and ultimately co-specialisation as the business develops and matures.

The need for sophisticated, dynamic management of the alliance network through this life cycle in order to manage the exit of some partners, the infusion of new ones, and/or re-contracting.

The structure of the alliance needs to shift between a broad, loose ‘clan’ and close-knit ‘clan’ at different stages.

In this Working Paper, Peter Williamson, Affiliate Professor of Asian Business and International Management, and Sarah Meegan, Research Fellow, examine the validity of the “alliances as entrepreneurship accelerators” model by examining the experience of NTT DoCoMo in two successive innovations: its innovative second-generation service, i-mode, and its third-generation FOMA (Freedom of Multi-media Access) offering. They also look at whether the model is continuing to apply as the company moves toward the early stages of its fourth-generation services.

In looking at the speed with which NTT DoCoMo developed its i-mode phone (a portable phone that offers Internet access as well as games and services), the authors find clear evidence for the potentially powerful role alliances can play in accelerating innovation. A common thread found throughout NTT DoCoMo’s experience is the use of alliances to provide access to a more diverse pool of capabilities, knowledge, and resources, than would normally be found within the confines of a single company.

The research also illustrated the varying roles and types of alliance partnerships during different stages of the innovation/entrepreneurial lifecycle (co-discovery, co-learning, co-option, and co-specialisation). So, for example, in the co-discovery phase, NTT DoCoMo partnered with companies that could help develop ideas, such as Nissan, IBM, Oracle and HP, while during the co-option phase (or ‘ventures’ phase), they partnered with companies like Sega, AOL Japan, Playstation.com, Inc., who could provide content or services to i-mode customers.

Included in the paper are graphs showing the entrepreneurial cycle, and NTT DoCoMo’s strategic alliances along each step of the cycle. Additionally, the authors provide an overview of the company’s strategic alliances from 2000-2002, charting alliances by growth strategy (diversifying the business model, international expansion, pioneering new markets), alliance structure (licensing agreement, joint venture, etc.), and NTT DoCoMo’s investment stake.

INSEAD 2003

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