Tech Alliances: Managing Your Alliance Portfolio

This article analyzes the different sorts of alliances firms have at their disposal in dealing with the turbulence of high technology sectors, further referred to as portfolio building blocks. Firms that have created the right mix of portfolio building blocks will be better able to meet the diverse demands of a high tech business environment. Two types of alliances are described; fruit fly alliances and elephant alliances. Also two types of relationships can be distinguished, i.e. strong and weak relationships. This paper shows that fruit fly alliances can be used in both strong and weak relationships. In weak relationships they are used as a scanning device, and may be referred to as option alliances. In a strong relationship, fruit fly alliances are referred to as project alliances, where partners cooperate in consecutive projects over a specific period of time. In this way, firms can form a strong relationship with companies in other technological clusters. Therefore, building a strong relationship with the help of fruit fly alliances is the way to be innovative while preserving trust. This form of cooperation is very useful in rapidly changing technological environments.