Faculty of Economics and Businesses

MSc. Strategic Innovation Management

By: Bas Hoogendoorn

S2891123 b.hoogendoorn@student.rug.nl

Supervisor: Hans van der Bij Co-Assessor: Eelko Huizingh

Date: 05-07-2020

Word Count: 14891 (excl. appendix)

What can New Product Portfolio Management learn from Alliance

Portfolio Management?

A systematic literature towards the identification of characteristics for successful new product

portfolio composition

Abstract Firms need to introduce a steady stream of new products to be successful. New product portfolio management

(NPPM) helps organizations to make optimal decisions regarding project selection and termination. Previous

research towards NPPM identified four compositions characteristics that form a prerequisite for a successful

portfolio: strategic fit, value maximization, balance and size/selecting the right number of projects. Due to ever

changing customer needs, increasing amounts of data and turbulent environments it seems that these

characteristics alone are not able to cope with the current developments in portfolio management. Based on a

systematic literature review consisting of 28 papers from the alliance portfolio management literature, this thesis

identified diversity and interdependencies as two additional characteristics which are viable candidates for

NPPM. Also new insights were found regarding balance and portfolio size. This thesis discusses the applicability

of the identified characteristics in NPPM and gives directions for future research to test the findings in NPPM.

Keywords: New Product Portfolio Management; Alliance Portfolio Management; Diversity; Interdependencies; Size; Balance; Strategic fit

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Content

1. INTRODUCTION .......................................................................................................................... 3

2. THEORETICAL BACKGROUND .............................................................................................. 5

3. METHODOLOGY ......................................................................................................................... 7

3.1 FORMULATION OF THE RESEARCH QUESTION ................................................................................ 7 3.2 SEARCHING FOR STUDIES ................................................................................................................. 7 3.3 SELECTION AND EVALUATION OF THE STUDIES ............................................................................. 8 3.4 ANALYSIS AND SYNTHESIS ............................................................................................................. 10

4. RESULTS AND DISCUSSION .................................................................................................. 12

4.1 DESCRIPTIVE ANALYSIS .............................................................................................................. 12 4.1.1. YEAR OF PUBLICATIONS ............................................................................................................... 12 4.1.2 DISCIPLINE .................................................................................................................................... 13 4.1.3 RESEARCH METHODS .................................................................................................................... 13 4.1.4 MANAGEMENT THEORIES .............................................................................................................. 14 4.1.5 COMPOSITION CHARACTERISTICS ................................................................................................. 15 4.1.6 DIFFERENT FORMS OF DIVERSITY ................................................................................................. 16 4.2 COMPOSITION CHARACTERISTICS AND COMPARISON WITH NEW PRODUCT PORTFOLIO MANAGEMENT ....................................................................................................................................... 17 4.2.1 DIVERSITY ..................................................................................................................................... 17 4.2.2. INTERDEPENDENCIES ................................................................................................................... 25 4.2.3 ALLIANCE PORTFOLIO SIZE ........................................................................................................... 27 4.2.4. BALANCE ...................................................................................................................................... 29 4.2.5. STRATEGIC FIT ............................................................................................................................. 31

5. CONCLUSION ............................................................................................................................. 34

6. IMPLICATIONS .......................................................................................................................... 36

6.1 THEORETICAL IMPLICATIONS AND RECOMMENDATIONS ........................................................... 36 6.2 MANAGERIAL IMPLICATIONS ........................................................................................................ 38

7. LIMITATIONS ............................................................................................................................ 39

LITERATURE ..................................................................................................................................... 40

APPENDIX ........................................................................................................................................... 48

APPENDIX 1: OVERVIEW FINDINGS CATEGORIZED PER COMPOSTION CHARACTERISTIC .............. 48 APPENDIX 2: ANALYSIS INDIVIDUAL ARTICLES ................................................................................. 50

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1. Introduction

In a world of global competition, organizational survival depends on implementing a steady

stream of successful new products (Hunt et al., 2008). Therefore, firms have to manage the

right innovation projects to be successful (Behrens, 2015). The decisions that are made to

manage the development of new products is described in the literature as new product portfolio

management (Cooper et al., 1999). The main objective within portfolio management is the

prioritization of new products or R&D projects (Cooper et al., 1999). Authors use different

terms to describe the concept of portfolio management in the field of innovation. To avoid

ambiguity, I follow Cooper et al. (1999) and use the term of new product portfolio management.

New product portfolio management (NPPM) is defined as a dynamic decision process, whereby

a business’s list of active new product projects is constantly updated and revised. In this process,

new projects are evaluated, selected, and prioritized; existing projects may be accelerated, killed

or deprioritized; and resources are allocated and reallocated to the active projects’ (Cooper, et

al, 1999, p. 335)’.

The most significant empirical research investigating NPPM was conducted by Cooper et al.

(1992, 1999, 2000, 2001, 2004). In his research he benchmarked current practices for project

selection and prioritization methods and developed an understanding of management’s

perception regarding the portfolio management methods. It was found that managers mostly

relied on financial models as a decision-making tool, however they found that those businesses

that used financial methods as the dominant portfolio selection method ended up with the worst

and poorest performing portfolios (Cooper, et al., 1999). Their most important finding was the

conceptual identification of four characteristics of successful NPD portfolio composition:

strategic alignment; maximizing NPD portfolio value; selecting the right number of projects;

and a balanced NPD portfolio.

These four objectives for a successful portfolio have been acknowledged by many researchers

(Kester et al., 2009; Nowak, 2013; McNally et al., 2013; Kester et al., 2014; Kock &

Gemünden, 2016). Researchers have enhanced these success dimensions with theory on

antecedents (Kock & Gemünden, 2016; Kester et al., 2014), social influences (McNally et al.,

2013) and managerial decision-making (Kester et al., 2009). A literature review conducted by

Meifort (2016) called for more research into the field of NPPM. Due to an ever-growing number

of innovation management tools, rapidly changing environments and an increasing amount of

data, future research could give a better insight on which factors and information are truly

important during the process of NPPM (Meifort, 2016). It is therefore questionable whether the

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characteristics as identified by Cooper et al. (1999) are the only characteristics needed to

successfully compose a portfolio. On top of that the study of Cooper et al. (1999) remained

only descriptive regarding the characteristics for portfolio composition and it did not show how

it is related to specific performance outcomes. Since portfolio management exists in different

fields such as investment (Cardozo & Smith, 1983), patent (Conegundus de Jesus & Salerno,

2018) or alliance portfolio management (APM) (Hoffmann, 2015), NPPM could possibly

benefit from the research insights from other areas. Several scholars have suggested that

theories in the field of finance represent potentially viable candidates for application in the

product market management context (Leong & Lim, 1991). This could also be the case for

alliance portfolio management (APM), as companies are involved in multiple different alliances

that have mutual relationships (Castro & Roldán, 2015). Accordingly, this resulted in the

following research question: Which characteristics for successful portfolio composition found

in different portfolio management streams are applicable to new product portfolio

management?

The aim of this study is to show and discuss possible successful portfolio characteristics from

different research streams and to extend the current knowledge about the characteristics in

NPPM. The choice is made for a literature review since this research method intends to assess

the current literature to specify research questions to develop the existing body of knowledge

further (Tranfield et al., 2003).

This thesis has a two-fold contribution. First, it creates a better understanding of the portfolio

composition characteristics as identified by Cooper et al. (1999): strategic fit, balance and the

selection of the right number of projects for the portfolio. It also contributes to the NNPM

literature with the identification of two portfolio composition characteristics from the APM

literature: interdependencies and diversity. Interdependencies between projects in the portfolio

results in synergies or conflicts, which makes the value of the portfolio greater or smaller.

Second, diversity at an intermediate level leads to novel resource and knowledge

recombination. Managers must follow a contingency approach regarding the implementation

of different diversity forms in the portfolio.

To answer the research question, the thesis is organized as follows. First, a theoretical

background will give insights in the current research on NPPM. Second, in the methodology I

will explain the different portfolio streams which are identified and how the research is

conducted. Thereafter in the results part I integrate all the literature and discuss it with NPPM.

The conclusion is aimed to provide an overview of the findings and to point out gaps that form

a potential for future research.

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2. Theoretical Background

The purpose of this section is to give an overview of the current research on NPPM. The

domain of NPPM includes several activities. First, portfolio management is about strategic

decision making (Cooper et al. 1999). It encompasses decisions made by senior management

about the type of products, markets and technologies they want to invest in and the relative

emphasis on the importance of each of those. Second, portfolio management is concerned with

the allocation of scarce resources within a company. Third, those resources need to be balanced

across the different projects. Based on those activities NPPM is defined as follows: ‘Portfolio

management is a dynamic decision process, whereby a business’s list of active new product

(and R&D) projects is constantly updated and revised. In this process, new projects are

evaluated, selected, and prioritized; existing projects may be accelerated, killed, or

deprioritized; and resources are allocated and reallocated to the active projects. The portfolio

decision process is characterized by uncertain and changing information, dynamic

opportunities, multiple goals and strategic considerations, interdependence among projects, and

multiple decision-makers and locations (Cooper, et al, 1999, p. 335)’.

Most of the literature regarding portfolio management is about the optimal configuration of the

portfolio. However, it was found that the result of the portfolio composition is influenced by

how a firm makes NPPM decisions (Hauser et al., 2006). Therefore, Kester et al. (2011)

investigated the portfolio decision making process and came with three dimensions of NPPM

decision making effectiveness. First, to make effective portfolio decisions, management needs

to have a complete understanding of all projects in the NPD portfolio, also known as a portfolio

mindset. An effective portfolio management process needs to provide an overview of all the

projects being considered, all the projects which are in progress, and when each is expected to

launch (Kester et al., 2011). Second, effective decision making uses a focus on short-term

actions and long-term goals. This focused effort is needed to avoid being opportunistic (Kester

et al., 2011). At last, decision making is most effective when a firm is agile in how they make

and implement NPD portfolio decisions (Kester et al., 2011).

Kester et al. (2011) suggests that the three dimensions of NPD decision making effectiveness

are antecedents of Cooper et al.’s (2001) three characteristics for successful portfolio

composition. Cooper et al. (2001) concluded that managers use three dimensions to evaluate

and compose their portfolio for new projects and products in order to achieve a successful

portfolio composition: value maximization, strategic fit, and balance. Cooper et al. (2002), later

expanded these three criteria with a fourth criteria; selecting the right number of projects. In

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case of maximal NPD portfolio value, the portfolio has an optimal ratio between resource input

and return (Kester et al., 2014). The optimal portfolio composition in terms of value

maximization differs by firm and depends on the strategic objectives and the market in which

the firm operates (Kester et al., 2014). Second, NPD portfolio composition must reflect the

firm’s strategic objectives. This means that each individual project should be aligned with the

firm’s innovation strategy articulated for specific market or technological areas. Also, the

portfolio needs to have projects incorporated which contribute to achieving a firm’s strategic

goals (Kester et al., 2014). The third characteristic, balance, is defined by Cooper et al. (2001)

as a portfolio with an optimal spread in individual project risk, and the right number of projects

for the available resources. A balanced portfolio should carry both incremental and radical

projects (Jansen et al., 2006); have a ratio between short- and long-term projects; and the

projects should be distributed according to the various NPD stage-gate stages (Cooper et al.,

2001).

Kester et al. (2014) was the first researcher who investigated the performance implications of

the three characteristics as identified by Cooper et al. (1999). They looked at the influence of

those characteristics on market performance, in terms of customer satisfaction, market

effectiveness, and profit (Vorhies & Morgan, 2005). Kester et al. (2014) found when a firm is

not appropriately balanced, it may be difficult to achieve strategic and financial objectives.

Furthermore, they found that in order to improve customer satisfaction the portfolio should be

aligned with the firm strategy. When the portfolio consists of products which are not in line

with the strategy of the firm, it will result in incoherent messages to the customer and eventually

lowering customer satisfaction.

Cooper et al. (1999) laid the foundation for research towards NPPM and its corresponding

characteristics for successful portfolio composition. Their research remained only descriptive

and did not provide empirical evidence on specific performance implications. Kester et al.

(2014) were the first researchers who investigated the performance implications of the

characteristics identified by Cooper et al. (1999). However, over the past twenty years there are

no researchers who critically discussed the relevance of these characteristics. Since the business

environments are nowadays under conditions of rapidly changing customer,- and

environmental needs, it is imaginable that there are additional characteristics to identify which

makes a portfolio successful. Therefore, this thesis examines the characteristics for successful

portfolio composition identified in different portfolio management streams and its applicability

for NPPM.

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3. Methodology In order to conduct an overview of the different portfolio management streams and its relating

criteria for successful portfolio composition, this thesis uses a systematic literature review. A

systematic literature review is a methodology that describes existing studies, selects and

evaluates contributions, analyzes and synthesizes data, and reports the evidence in such a way

to reasonably draw conclusions about what is and what is not known (Briner & Denyer, 2012).

In this thesis we will follow five key steps as described by (Briner & Denyer, 2012): (1)

formulation of the research question, (2) locating the studies, (3) selection and evaluation of the

studies, (4) analyzing and synthesizing information, and (5) reporting the best evidence.

3.1 Formulation of the research question

A research question is needed to give direction to the systematic literature review. According

to Counsell (1997) this question defines which studies will be included, what the strategy will

be to identify the relevant studies, and which data needs to be extracted from the studies.

Therefore, we identified the research question in the introduction section.

3.2 Searching for studies

A systematic literature review starts with the identification of keywords and search terms

(Tranfield et al., 2003). This systematic literature review only covers English articles, as this is

the language widely used within scientific studies, the databases are English, and the search

terms will be in the English language. In order to get the most information possible, I will not

limit the search with a certain time period. This also accounts for the type of research (i.e.

qualitative or quantitative, or both) and contexts of the research. To search for relevant articles,

I made use of the Ebsco database. This database is used because of its advanced search options

and it gives access to reliable and peer reviewed content. I have only selected articles that are

published in academic journals and which are peer reviewed.

I have chosen to use a top-down method to select additional portfolio management streams

besides NPPM. A top-down method means that I am already familiar with the topic of portfolio

management, I therefore identified three relevant portfolio management streams: alliance

portfolio management, investment portfolio management and patent portfolio management.

The first search without preconditions gave the following hits: 582, 36.537 and 431,

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respectively. To make sure I did not forget to include a portfolio management stream, I

performed an additional search using the bottom-up approach. A bottom up approach is used

when someone is unfamiliar with a specific topic and aims to gather general knowledge. Using

the key term “portfolio management” resulted in 67043 articles with portfolio management in

the title or the abstract, however did not showed any other relevant portfolio management

stream for this study. A benefit of the Ebsco database is that it gives an overview of the different

subjects of the articles. Therefore, I can easily identify the different subjects of the articles and

determine the different portfolio management streams. Portfolio management subjects

according to Ebsco are financial management, research, alliance, decision making, finance,

investment, economics, evaluation, decision making, patent and project management.

Secondly, I did a screen of the titles of the articles. Based on these results I will continue with

the three different portfolio management streams: alliance portfolio management, investment

portfolio management and patent portfolio management. Therefore, the search terms that are

used to further examine the different streams are “Alliance portfolio management”, “Investment

portfolio management”, and “Patent portfolio management”.

3.3 Selection and evaluation of the studies

To create a transparent selection process, I set up inclusion and exclusion criteria to assess if

each study really addresses the research question. Criteria used for this research were:

Inclusion criteria: Studies that cover the topics of portfolio management in the field of

investment, alliance and patent were selected if they cover the criteria for successful portfolio

composition. This can be in the form of empirical research, case studies, meta-analysis and

literature reviews.

Exclusion criteria: Studies that focus on individual cases without a perspective of the complete

portfolio are excluded. Also, studies that focus on general management practices or evaluation

tools are not selected.

The registration and classification of this study was done in Microsoft Excel. During the

systematic literature review we found a selection of 3.627 articles, which all are related to

alliance-, investment-, or portfolio management (See table 1). The article selection was

conducted in April 2020.

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For my initial search I selected the articles where alliance-, investment-, or patent portfolio

management is mentioned in the title or the abstract. Those articles are registered in Excel.

After this, I performed a second search where I included the inclusion and exclusion criteria to

select our final pool of articles for the systematic literature review. In the Excel file I highlighted

articles green if they cover characteristics for successful portfolio composition, articles that

were possibly useful are highlighted orange and articles that did not cover the criteria for

successful portfolio composition were highlighted red. Orange articles were subject to a

discussion in order to make the final decision if they should be incorporated in the data set.

Table 1 shows the search results per research stream. Regarding alliance portfolio management

I found 28 articles describing characteristics of successful alliance portfolio composition. These

articles comprise my final data set and will be used for this research paper. With regard to

investment portfolio management I found no useful articles. Articles describing investment

portfolio management mostly focus on mathematical methods to calculate and compare

portfolios considering the highest return based on risk predictions. Since the focus within

investment portfolio management is not on the characteristics for successful portfolio

composition, I eliminated this research stream for this research. Concerning patent portfolio

management, Conegundus de Jesus & Salerno (2018) stated in their literature review that the

literature about patent management is not a well-developed topic. Their literature review

discussed useful topics of new product portfolio management to be used in patent portfolio

management. This insight combined with the judgement of our initial pool of articles, I also

could not find articles which comprised characteristics of successful patent portfolio

composition. I therefore decided, along with investment portfolio management, to not focus on

patent portfolio management literature in identifying the characteristics of successful portfolio

composition.

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Keyword Initial selection Final selection

Alliance Portfolio Management

(total of 582 articles)

50 articles 28

Investment Portfolio Management

(total of 2614 articles)

36 articles 0

Patent Portfolio Management

(total of 431 articles)

29 articles 0

Table 1. Search results in numbers

3.4 Analysis and synthesis

The objective of the analysis within the systematic literature review is to analyze individual

papers and synthesis by making associations between findings. The aim of the analysis is to

examine and dissect individual studies and explore how the components relate to one another

(Briner & Denyer, 2012). I started the analysis by creating an overview of the findings about

specific composition characteristics. De composition characteristics are grouped together with

their corresponding performance implications per article. Appendix 1 gives an overview of the

identified composition characteristics and its related performance outcomes.

The second step, synthesis, will create the added value of my research paper. The synthesis is

the process of putting the findings from individual studies together “into a new or different

arrangement and developing knowledge that is not apparent from reading the individual studies

in isolation” (Denyer & Tranfield, 2009; Briner & Denyer, 2012). In order to synthesize the

articles, a narrative synthesis approach is used. This method is chosen because of the nature of

the literature in our dataset, which consist of both quantitative and qualitative research methods.

With this method we map the characteristics for successful portfolio composition emerging

from literature on alliance portfolio management literature in order to answer our research

question. This is done by describing how these characteristics fit in the current literature on

NPPM.

The synthesis of the articles is based on the characteristics proposed in table 2. These

characteristics make it possible to synthesize, integrate and accumulate the information and

results of the studies. Each article is analyzed and synthesized with the use of Microsoft Excel.

By analyzing and synthesizing each article in Excel I could easily identify similarities and

differences between the articles.

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Title Title of the article

Authors Authors

Year Year of publication of the study

Composition

characteristic

Composition characteristic that might be applicable to NPPM

composition

Motivation Motivation for the researchers to research this topic

Timing period Timing period of the research

Research method Research method used in the article

Discipline Discipline field of the research (e.g. operations, management)

Management theory Management theory used as viewpoint for the topic

Segment Type of companies the research was executed

Region Region where the research took place

Relevant research

objective

The research objective(s) relevant to the research question of

this research

Relevant variables Variables used in the article to measure the hypothesis relevant

research

Relevant findings Findings relevant to the objective of this research

Limitations Limitations that are relevant to this research

Table 2. Characteristics of articles

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4. Results and Discussion

4.1 Descriptive analysis

This chapter elaborates on the main findings emerged from the 28 articles of the APM literature.

First a descriptive analysis is performed to give an overview of the year of publications,

different disciplines, management theories and composition characteristics resulting from the

consideration set. Next, the findings of the identified composition characteristics as found in

the APM literature are discussed in detail.

4.1.1. Year of publications

Figure 1: Year of publications Figure 1 gives an overview of the years in which the articles are published. It can be noticed

that research towards alliance portfolio management is relevant since most of the articles are

recently published. Nine of the twenty-eight papers are published in 2017, which implies that

APM is a relevant topic nowadays.

0123456789

10

2005 2007 2010 2011 2012 2013 2014 2016 2017 2018

Number of publications per year

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4.1.2 Discipline

Figure 2: Disciplines in which APM is described Figure 2 gives an overview of the distribution of the articles among the different disciplines as

identified by the SOM research institute (2020). The main research towards the composition

characteristics for APM is from the management discipline (19). Four of the articles belong to

the field of innovation & technology management. Two articles belong to the field of

organization studies and the two to the field of marketing.

4.1.3 Research methods

Figure 3: overview of the research methods The articles are analyzed based on the research methods employed in the different articles. It is

an important finding that most of the research is quantitative research (22) Since the goal is to

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4

2

2

Management Innovation & Technology Management Marketing Organization Studies

22

4

2

Quantitative Qualitative Combination

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identify composition characteristics for NPPM, it is important that the composition

characteristics as identified in the APM literature are empirically tested.

4.1.4 Management theories

Figure 4: Overview of the management theories

In figure 3 an overview is given of the different management theories that are used in the

articles. A strategic management theory is a system of ideas which explains the origin,

evolution, principles, and applications of strategic management (Omalaja & Eruola, 2011). It

is important to be aware of the management theory which is used since it explains which

perspective is used to describe a specific phenomenon.

The main streams of literature are based on the Resource-Based View (9) Contingency

Perspective (4) Knowledge-Based view (3) and Resource Dependence Theory (2). The

resource-based view (RBV) sees the firm as a bundle of heterogeneous resources, where a

competitive advantage can be achieved by a firm’s ability to exploit and (re)combine resources

that are valuable, rare, and hard to imitate and substitute (Teece et al.,1997). The alliance

literature extended the resource-based view by expanding the firm’s boundaries to their inter-

firm alliance relationships and the alignment with their external environment (Dyer and Singh,

1998). From a contingency perspective the most appropriate style of management depends on

0

1

2

3

4

5

6

7

8

9

10

Resource

-Based View

Continge

ncy Persp

ective

Knowledge-Base

d View

Socia

l Netw

ork Th

eory

Resource

-Depen

dence

Theory

Transac

tion-Cost

Economics

Structu

ral Persp

ective

Relational

Perspec

tive

Manag

erial P

erspecti

ve

Not Specif

ied

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the context of the situation. Organizations should develop an appropriate strategy based on the

specific situation and the conditions they are experiencing (Omalaja & Eruola, 2011). The

knowledge-based view (KBV) assumes that knowledge is the primary source of value for firms

(Grant, 1996). Knowledge creation is a recombinant process where firms search for

(re)combinations of different knowledge components (Karim & Kaul, 2015). The resource

dependence theory (RDT) states that firms do not have all critical resources, so they must

acquire those missing resources externally and enter into exchanges with partners to obtain the

necessary resources (Pfeffer and Salancik, 1978).

4.1.5 Composition characteristics

Figure 4: Composition characteristics APM

Figure 3 shows the composition characteristics as identified in the alliance portfolio

management literature. Diversity (15) is the most prominent characteristic identified in the

alliance portfolio management literature. Interdependencies are mentioned in eight articles.

Size, strategic fit, and balance represent two, two and one of the articles respectively.

2

15

8

21

Size Diversity Interdependencies Strategic Fit Balance

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4.1.6 Different forms of diversity

Figure 5: Different forms of diversity

Since diversity is characterized by different forms in the literature, figure 4 gives an overview

of these different forms. Six articles define diversity as technological diversity and functional

diversity is mentioned four times. Industry, governance and partner type diversity are each

represented three times. Finally, exploration vs exploitation diversity is mentioned two times.

The next section will discuss in detail the findings regarding the composition characteristics in

the alliance portfolio management literature.

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3

3

4

3

2

Technological Governance Industry Functional Partner Type Exploration vs Exploitation

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4.2 Composition characteristics and comparison with new product portfolio management

The second step in this result section is to describe the findings regarding the portfolio

composition characteristics found in the APM literature. An overview will be given about the

findings of the alliance portfolio composition characteristics and thereafter the portfolio

composition characteristics will be linked to the field of NPPM and further discussed.

4.2.1 Diversity

As shown in figure 3 diversity forms a prominent characteristic in the APM literature. A meta-

analysis conducted by Lee et al. (2017) concluded that the performance outcomes are not

uniform across all diversity domains. Therefore, the findings of the different diversity forms

are explained with their corresponding performance outcomes.

Diversity – technological

A technological diverse alliance portfolio is defined as the diversity of technological resources

held by the partner firms in the alliance portfolio (Marhold & Kang, 2017). It is argued by

Fleming (2001) and Goerzen & Beamish (2005) that access to diverse technological domains

creates a wider perspective and stimulates creative thinking since innovation often results from

recombination across diverse technological fields. According to Cohen & Levinthal (1990),

exposure to diverse technology domains increases the likelihood of new knowledge

assimilation by associating new external knowledge with knowledge accessed in the past. To

cope with the scarcity and uncertainty of superior products, diverse technology domains enables

firms to make more informed decisions (Bowman & Hurry, 1993). Drawbacks relating to

technological diversity are the risk of information overload and diseconomies of scale (Ahua &

Lampert, 2001). Next to this, knowledge recombination becomes harder when diversity is high

(Fleming & Sorenson, 2001).

Following above reasoning, Wuyts and Dutta (2014) investigated the influence of technological

diversity in the alliance portfolio on superior product innovation. They hypothesized an

inverted-U effect of portfolio diversity on superior product innovation, however they found that

firms with either focused or highly diverse alliance portfolio strategies outperform other firms

that have a balanced portfolio (U-shape relationship). They could not give an explanation of

this unexpected finding and argued that more research is required with alternative dependent

variables.

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Van de Vrande (2012) found a different result regarding technological diversity and innovation

performance. In their study they use the term technological proximity as the extent to which the

technological competences of the partners are in line with the technological competences of the

firm. Their study was just as the study of Wuyts and Dutta (2014) based on pharmaceutical

firms and they focused on the influence of technological proximity on innovation performance.

They argue from a KBV perspective that a diverse alliance portfolio leads to knowledge

recombination and that a diverse portfolio avoids being trapped into a particular technological

trajectory. However, greater variance of knowledge also results in greater complexity of

managing the alliance. They concluded that variance in relative technological proximity

between the focal firm and its partners leads to an inverted U-shape relationship related to

innovation performance.

Subramanian and Soh (2017) examined the influence of technological diverse alliance

portfolios on the firm’s breadth of recombinant innovation from a social network perspective.

The social network theory states that extensive ties in a network widen information channels

and mitigate organizational inertia (Rosenkopf and Almeida, 2003). Having a technological

diverse portfolio increases the likelihood to combine old and new ideas to produce

commercially viable solutions to solve certain problems. They found a positive influence of

technological diversity of alliance portfolios on the breadth of recombinant innovation.

Whereas, Wuyts and Dutta (2014), Van de Vrande (2012), and Subramanian and Soh (2017)

investigated the influence of technological diversity on specific performance outcomes,

Marhold and Kang (2017) investigated in their study what is affecting the diversity of a firm’s

alliance portfolio. They examined how a firm’s internal technological diversity influences the

technological diversity of the alliance portfolio. They found that increasing internal diversity

of the technological resources held by a firm negatively influences the diversity of its portfolio.

This can be explained by advocating that firms strive for organizational ambidexterity; pursuing

both exploration and exploitation activities (Raisch et al., 2009). For example, firms with high

internal technological diversity, which is related to exploration within the firm’s boundaries,

focus their external technology acquisition on a smaller range of technologies in order to form

exploitative alliances. Therefore, their alliance portfolio will be less technological diverse.

Diversity – partner type

Partner type diversity is defined as the number of different partner types (i.e. competitors,

universities, customers, suppliers and research institutes) with whom a focal firm collaborates

(Hagedoorn et al., 2018). From an RBV perspective, firms collaborate with external partners to

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strengthen their internal innovation efforts (Faems & Vanhaverbeke, 2009). Superior

innovation performance can be achieved by combining the resources of partners in the alliance

portfolio and exploiting complementarities and synergies (Nieto & Santamaria, 2007).

Changing the perspective to the attention-based view, high levels of alliance portfolio diversity

could lead to information overload and thereby decreasing the ability to take optimal advantage

of learning opportunities (Koput, 1997). Therefore, de Leeuw et al. (2014) and Hagedoorn et

al. (2018) concluded that APD has an inverted U-shape relationship with innovative

performance. de Leeuw et al. (2014) also found an inverted U-shape relationship between APD

and productivity. A firm can increase its productivity by combining skills, assets and knowledge

from different alliance partners. However, the expansion in the number of different alliances,

may increase the risk of opportunistic behavior (Teece, 2002).

De Leeuw et al. (2014) also took into consideration the type of innovation (i.e. incremental or

radical) and concluded that partner type diversity in a firm’s alliance portfolio has an inverted

U-shaped relationship with productivity and radical innovative performance; and a positive

relationship with incremental innovative performance.

Diversity – Functional

Wagner and Zidhorn (2017) focused on functional diversity, which are the knowledge

differences in an alliance portfolio (Heimeriks et al., 2009). Knowledge differences are the

result of two independent factors, namely alliance content (e.g., alliance focus on R&D or

marketing) and alliance mode (e.g., license or informal collaboration). Wagner and Zidhorn

(2017) found that alliance portfolio diversity (APD) negatively relates to innovation output

since it increases complexity in managing the alliance portfolio. Moreover, they found that

APD negatively moderates the relationship between the number of alliances and innovative

output, again as a result of an increase in complexity. They also took into consideration the role

of firm age and found that older firms negatively moderate the relationship between APD and

innovation output. Older firms have already developed technological capabilities which allows

them to focus on fields where they already have expertise (Wagner & Zidhorn, 2017)..

However, younger firms need a more diverse portfolio since they have to develop the capacities

to survive in high-tech industries. A diverse portfolio helps young firms to acquire information,

skills and resources from various sources to develop these capacities (Wagner & Zidhorn,

2017).

Jiang et al. (2010) found different results regarding the influence of functional diversity on

performance, they investigated the influence of functional diversity on firm performance and

20

found a positive relationship. When a firm increases the functional diversity of its alliance

portfolio, it creates a balanced portfolio consisting of core and noncore activities, it gains access

to supplementary and complementary assets, and it expands its knowledge base (Jiang et al.,

2010). The different results compared with Wagner and Zidhorn (2017), can be explained by

the management perspective. Whereas the first mainly focus on the relational view and the

potential for complexity of managing alliances portfolios, Jiang et al. (2010) took an RBV

perspective stating that a diverse alliance portfolio can lead to useful resource combinations.

In the paper of Beers and Zand (2013) it is investigated what the impact is of functional diversity

on innovation performance. Functional diversity relates in this study to cooperation with

partners from multiple categories. They found that diversity positively influences innovation

performance and that this effect is higher for radical performance than incremental

performance. This is explained by the RBV suggesting that a diverse portfolio provides access

to a broader range of technological knowledge, information and complementary skills

(Duysters and Lokshin, 2007). Firms who introduce radical products are more in the need of

these external resources since they deal more with technological complexity, uncertainty and

financial risk. It was found that the influence of partner diversity on innovation performance is

more profound in high-technology and knowledge-intensive industries since these industries

have more market volatility, uncertainty and complexity in their innovation projects (Beers &

Zand, 2013)

Cui and O’Connor (2012) investigated the moderating influence of functional diversity on the

relationship between alliance portfolio resource diversity and firm innovation. They found that

diversity of functional activities in a portfolio negatively interacts with alliance portfolio

resource diversity and firm performance. High functional diversity means firms in the alliance

portfolio do not share common activities (i.e. marketing and R&D). In such situation’s

information and resource sharing between firms becomes harder since they lack knowledge.

Therefore, the low absorptive capacity as a consequence of this lack of knowledge overlap

limits the degree of knowledge transfer between alliances.

Diversity – Industry

Industry diversity refers to industries that have different routines and processes in upstream and

downstream activities (Lee et al., 2017). Jiang et al. (2010) found that alliance portfolio partner

diversity is associated with firm performance that first decreases and then increases (U-shape).

Greater partner industry diversity provides learning and resource access benefits. Partnering

with up- or downstream firms can offer complementary resources and facilitate entry into new

21

markets (Kogut, 1988). However, firms have to first overcome two obstacles. Partners from

unrelated industries could have different routines and processes which makes collaboration

more difficult. Second, increasing diversity leads to alliance management complexity. As firms

become better able to manage their alliances and accumulate resource benefits, they reach a

minimum degree of diversity effectiveness and can expect net gains surpassing this threshold

(Jiang et al., 2010).

Diversity – Governance

Governance diversity is defined as the various ways in which the alliance is governed such as

an equity or non-equity alliance (Lee et al., 2017). Different governance structures have

different implications for the degree of integration, level of commitment, and learning (Kogut,

1988). Jiang et al. (2010) found in their quantitative study in the automobile industry a negative

relationship between governance diversity and firm performance. This can be explained based

from a transaction cost perspective. It takes time for firms to set up a governance structure for

a specific alliance, since each alliance requires managerial attention, unique resource

commitments, and relationship-building routines (Jiang et al., 2010). Firms with more

experience regarding a specific governance structure can help a firm institutionalize knowledge

and skills about a particular governance form (Sampson, 2009). However, matching governance

structures to various alliances in the portfolio is not very effective. It can increase managerial

complexity and thereby losing opportunities for institutionalized learning (Jiang et al., 2010).

Diversity – Exploration vs Exploitation

Yamakawa et al. (2010) describes diversity in their paper as the choice between explorative

and exploitative alliances. They argue that firm performance can be affected by the choice of

exploration/exploitation alliances in the alliance portfolio. Exploration alliances are needed

when a firm search for new opportunities through the acquisition of skills, knowledge, and

capabilities which are new to the firm (Koza & Lewin, 1998). Exploitation alliances are needed

when a firm wants to leverage their existing resources and capabilities (Rothaermel & Deeds,

2004). It was found that firms that have more exploitative alliances in their portfolio tend to

have higher firm performance in the near term. They furthermore took the role of firm age into

consideration and found that younger firms will benefit more from a higher ratio of exploitation

alliances, while older firms will benefit more from a higher ratio of exploration alliances.

Younger firms have limited internal resources and capabilities (compared to mature firms),

22

which creates the need to collaborate with older firms to access complementary resources such

as financial capital and distribution capabilities (Pisano, 1991).

Once exploitative practices become more institutionalized in their internal routines, matured

firms face the threat of falling into the familiarity trap (Levitt & March, 1988). Hereby, the

firm’s existing resources and routines become obsolete and no longer match with their current

environment (Eisenhard, 1989). Firms can get access to new knowledge by entering into

explorative alliances since they offer the potential for resource recombination (Hagedoorn &

Schakenraad, 1994).

Comparing diversity with new product portfolio management

Diversity is a multi-dimensional concept which showed different performance implications in

the APM literature. Based on the above findings I suggest that managers in NPPM should take

a contingency perspective regarding the different forms of diversity. Meaning that the type of

diversity in the new product portfolio is contingent on the age, needs and the environment in

which the organization operates.

A technological diverse portfolio in NPPM means diversity in technological resources required

by the new product projects. Technological diversity can help firms overcome learning traps by

engaging in areas which are unfamiliar to them (Ahuja & Lampert, 2001). If the portfolio

consists of technological diverse projects, it stimulates the breadth of creative thinking since

people and projects with different knowledge backgrounds are brought together. Eventually

this creative thinking will lead to resource recombination whereby new projects can be initiated.

Having a portfolio with a broad technological background enables the firm to make better

informed decisions. However, we know from the alliance literature that increasing

technological diversity could lead to information overload which makes it difficult for

managers to make effective decisions.

Beers and Zand (2013) found that alliance portfolio diversity (functional) positively influences

innovation performance and that his effect is higher for explorative performance than for

exploitative performance. Radical innovations in NPPM are projects that focus on the changing

customer/environmental needs and are new to the firm (Bauer & Leker, 2013). A diverse

functional portfolio gives access to a broader range of knowledge and information which

enables knowledge recombination. Since exploratory products come along with complexity,

uncertainty and risk they will benefit more from the new knowledge recombination.

Wagner & Zidhorn (2017) took the role of firm age into consideration in explaining the

influence of functional diversity on the alliance portfolio. To effectively manage a diverse

23

portfolio firms should have the required capacities (i.e. resources) and capabilities (i.e. decision

making). Young firms do not always possess the required financial or human resources,

whereas older firms already have the needed capabilities to effectively deal with increasing

technological diversity. To give an illustration, functional diversity can lead to situations of

information overload and complexity of managing the portfolio, older firms have more

expertise and routines to effectively manage this complexity and will have more experienced

human resources available to deal with this amount of information.

In the NPPM literature Zahavie and Lavie (2013) investigated the influence of industry

diversity on firm performance. They made a distinction between inter-industry diversification

and intra-industry diversification. The first form of diversity is defined as the expansion into

additional businesses which are new to the firm (Berry, 1975 & Chandler, 1962), the latter is

defined as a firm’s presence in more than one market niche or product line within a single

industry (Li & Greenwood, 2004). The performance outcomes of inter-industry diversity

showed an inverted U-shape relationship between industry business diversity and firm

performance (Grant et al.,1988 & Palepu, 1985). Regarding intra-industry diversity, Zahavie

and Lavie (2013) showed that intra-industry diversity has a U-shaped effect with firm

performance.

Increasing industry diversity in NPPM is beneficial since it broadens the compositions of the

portfolio and thereby its ability to increase sales (Fernhaber & Patel, 2012). Second, when a

portfolio consists of multiple diverse products it is difficult for competitors to replicate the

portfolio, therefore a diverse portfolio increases competitive advantage. Third, greater industry

diversity is beneficial for the firm’s technical core which makes it more capable of reacting to

changes in customer demand and the environment. Finally, the interdependencies which arise

due to increasing industry diversity lead to synergies and shared learning within and outside the

company (Fernhaber & Patel, 2012).

However, after a certain point increasing industry diversity leads to a decrease in firm

performance. Having a portfolio of diverse products from different industries requires large

financial investments, which not always resulted in the expected payoffs (Johnson & Kirchain,

2011). Following the reasoning in the alliance portfolio literature and the transaction-cost

perspective, an increase in industry diversity leads to higher coordination costs. This is

especially the case for younger firms since they lack the routines of coordinating a complex

portfolio. Finally, in line with the attention-based view, managers may experience information

overload through a growing portfolio and the related resource allocations. Managers are more

likely to make suboptimal decisions since they rely on biases and heuristics, which could result

24

in new products that do not increase firm value (Leenders et al., 2007). Based on the above

reasoning regarding the multiple forms of diversity I propose that:

Proposition 1: Diversity (at an intermediate level) can be seen as an additional characteristic

for successful new product portfolio composition.

Future research on diversity in NPPM

Since diversity is a multi-dimensional concept manager should take a contingency perspective

regarding the implementation of diversity in the new product portfolio. First, technological

diversity in the portfolio enables firms to overcome the problem of learning traps by entering

in areas which are unfamiliar to them. However, there is a tipping point where situations of

information overload occur. Future research on technological diversity could investigate how

managers can effectively deal with the increasing technological diverse knowledge. The second

form of diversity, partner type, is explained as the different partner types with whom the focal

firm collaborates. Future research on partner type diversity could investigate if partner type

diversity is a relevant concept in NPPM and what the different partner types in the NPPM

portfolios are. Having a functional diverse portfolio stimulates the development of explorative

products and older firms are better able to cope with a functional diverse portfolio. Future

research in NPPM could investigate how a functional diverse portfolio influences the

development of exploitative projects, to see whether functional diversity hampers or

strengthens the development of these projects. Industry diversity strengthens a firm’s

competitive position by offering more varied products and making them better able to respond

to environmental changes. Governance in NPPM consists of four elements: 1) formality and

explicitness; 2) review frequency; 3) decision transparency; and 4) information support (Urhahn

& Spieth, 2014). Following the reason of Tushman and O’Reilly (2013), organizations needs

to pursue both exploratory and exploitative projects. Therefore, future research regarding

governance diversity could investigate whether it is beneficial to set up different governance

structures for explorative and exploitative projects. Since exploratory projects require less risk

it could be argued that these projects need to be organized and reviewed in a less formalized

way to speed up the development of these projects. Since it is argued by Cui and O’Connor

(2012) that different forms of diversity influence each other, future research could investigate

whether it is beneficial or not to have multiple forms of diversity in the portfolio.

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4.2.2. Interdependencies

A firm’s alliance portfolio is not merely the sum or collection of its constituent alliances with

the focal firm (Wassmer & Dussauge, 2012). Therefore, APM is also studied more holistically

at the portfolio level. A central issue which is related to this are the portfolio effects created by

the interdependencies between individual alliances in a portfolio. Firms need to continuously

reconfigure their alliance portfolio since interdependencies in the alliance portfolio create two

different types of outcomes: synergies or conflicts (Wassmer, 2010). Synergy and conflicts

result in the so-called alliance portfolio effect, which makes the overall value created by an

alliance portfolio greater (synergy) or smaller (conflict) than the sum of the values created by

each individual alliance in the portfolio (Vassolo et al., 2014)

Degegner et al. (2018) performed quantitative research and investigated the moderating

interplay of two alliance management capabilities; portfolio coordination capability and

proactive partner selection capability on the relationship between APD and innovation

performance, they found that firms realize innovation benefits from a diverse set of external

alliance partners only when they focus on and apply internal coordination or partner selection

routines to manage these alliance. As a result of an increase in APD firms should be better able

to benefit from synergies resulting from alliances because they can exploit interdependencies

among different partners (Vassolo et al., 2004). Routines to identify interdependencies,

determine areas of synergy, and synchronize activities across alliance partners are the result of

a portfolio coordination capability. Proactive partner selection capability is the extent to which

a firm is engaged in the process of discovering and acting on new partner opportunities (Sarkar,

et al., 2009). An increase in APD potentially results in disagreements between firms in the

alliance portfolio. To ensure mutual understanding and avoid conflicts, it is an important task

for firms to select firms which are compatible with other alliances in the portfolio (Lavie, et al.,

2012). Degegner et al. (2018) showed that firms realize synergies from a diverse alliance

portfolio only when they focus on and apply internal coordination or partner selection routines

to manage these alliances.

The need to reconfigure the alliance portfolio is acknowledged by Asgari et al. (2017), who

investigated alliance portfolio reconfiguration as a consequence of technological discontinuity.

Forming new alliances create complementary and substitution pressures that lead to broader

reconfiguration of the alliance portfolio (Asgari et al., 2017). A technological discontinuity

affects resource value in five different ways: A new resource occurs since the discontinuity

made the resource valuable (new resource). A resource value can increase as a consequence of

a technological discontinuity (reinforced resource). The value of a resource can decline

26

(challenged resource). The value of a resource is reduced to zero (obsolete resource) and a

resource can be unaffected by the discontinuity. (unaffected resource). Reconfiguration

therefore can be needed to either enter into complementary alliances to improve the value of

co-specialized assets or terminate alliances once they reflect a reduction in the value of

particular resources (Asgari et al., 2017).

Also, Hoehn-Weiss et al. (2017) provided evidence for considering the whole alliance portfolio

instead of only each alliance individually. A benefit of having many partners in the alliance

portfolio is the ability to have access to their resources, however, it also creates the opportunity

for redundancy whereby multiple firms offer the same resources to the focal firm. Hoehn-Weiss

et al. (2017) found therefore that the greater the redundancy in the alliance portfolio, the worse

the effects are on the focal firm’s performance. This can be explained because the focal firm

must still invest time and energy into developing ties with others but will not be able to access

new knowledge or resources in return (Hoehn-Weiss et al. 2017).

Comparing interdependencies with new product portfolio management

Despite the growing importance of having a more holistic view of the new product portfolio,

Elonon and Artto (2003) revealed in their study that the links between projects are not

considered systematically due to complexity and lack of knowledge. In new product portfolio

management interdependencies arise as projects in the portfolio need to share the resources

which are assigned to the portfolio. Those resource interdependencies “occur when the total

cost of a portfolio is different from the sum of individual costs” (Schmidt, 1993, p. 404). A

second form of interdependency in NPPM is technological interdependency which is the ability

to leverage existing technological knowledge and knowledge diffusion between projects

(Verma & Sinha, 2002). Third, outcome dependencies arise when projects have to wait for the

end result of other projects (Killen & Kjaer, 2012). Finally, learning dependencies occur when

projects need to incorporate the capabilities and knowledge gained through another project.

Since interdependencies do occur in NPPM it is therefore something worthwhile to consider in

forming the new product portfolio.

Proposition 2: Interdependencies are an additional characteristic for successful new product

portfolio composition and have either a positive or negative influence on the portfolio.

27

Future research on interdependencies in NPPM

The studies by Hoehn-Weiss et al. (2017) and Asgari, et al. (2017) showed the importance of

interdependencies in the alliance portfolio. Degegner et al. (2018) gave insight into the

capabilities that are needed to realize synergies in the alliance portfolio. However, these studies

do not show how firms can form upfront alliances to maximize the synergy effects.

Interdependencies as described in the alliance literature are more the result of reactive events

(i.e. technological discontinuities) and management capabilities to (re)configure the portfolio.

Also, in NPPM interdependencies do occur, but there is no research on how firms can maximize

the synergistic effects in the product portfolio. More research is needed on what type of projects

(i.e. radical or incremental, explorative vs exploitative) create synergistic effects and what the

corresponding performance outcomes are for the total portfolio.

4.2.3 Alliance portfolio size

Alliance portfolio size (APS) is the total number of alliances in which the focal firm

simultaneously participates (Faems et al., 2012). Faems et al. (2012) showed in their conceptual

paper that there are mixed results regarding the influence of APS on firm or innovation

performance. These differences are the result of the managerial perspective of the researcher.

Resource-based arguments state that firms engage in different alliances to get access to

complementary resources (George et al., 2001), have the potential to realize economies of scale

and scope (Lavie & Miller, 2008) and experiencing learning opportunities (Kale & Singh,

2007). Interdependencies are also the result of an increased APS, since one alliance in a

portfolio could have a positive impact on other alliances in the portfolio (Faems et al., 2010).

Lahiri and Narayanan (2013) found that APS has an inverted U-shaped impact on both

innovation performance and financial performance. In their study they take an RBV perspective

suggesting that innovation involves combination and recombination of existing and new

resources available to the firm (Lahiri and Narayanan, 2013). Firms with larger APS will have

access to a wider variety of resources from different partners, which increases the likelihood of

identifying knowledge elements which were previously not known by the firm. Second, with

access to diverse knowledge elements from external sources, there is an increased possibility

for novel combinations. However, there are also challenges when the alliance portfolio size

increases. First, it is harder to search and identify knowledge resources across a wide portfolio

of partners. Second, when a firm utilizes resources from multiple partners, they need to adapt

internal routines to multiple partners.

28

Regarding financial performance, firms with larger APS could have better financial

performance since firms with larger alliance portfolios are better able to cope with

environmental changes by effectively responding to uncertainties (Duysters et al. 1999).

Secondly, there is an increased potential for economies of scale from multiple alliance partners.

However, also regarding the financial performance there is a limit to the positive effects of

increased APS. The effectiveness of a manager’s ability to exploit the alliances will decrease

given the increased demands on managerial attention and bounded rationality (Simon, 1991).

Wagner and Zidhorn (2017) found a positive relationship between APS and innovation output.

They take the perspective of the knowledge-based firm by arguing that firms enter into alliances

to acquire new knowledge which is not internally available.

Bos et al. (2017), took the perspective of the KBV and found that a situation of information

overload restricts the ability to engage in knowledge recombination by an increasing APS. They

found a hampered effect of APS on the relationship between alliance portfolio concentration

and MNC performance.

Changing the perspective from the RBV and KBV to the resource dependence theory (RDT),

Lahiri and Narayanan (2013) stated that with increasing levels of innovation, the positive

impact of increasing APS on financial performance is dampened. The RDT states that when

firms are dependent on external resources, firms may reduce uncertainty in the flow of these

needed resources by reducing their dependency on these external sources (Casciaro and

Piskorki, 2005). Therefore, firms with previous success in innovation engage more in repeated

use of internal knowledge which limits the benefits of an increased APS.

Comparing portfolio size with NPPM

In the NPPM literature it is stated by Cooper et al. (2004) that firms should select the right

number of projects for their portfolio. Following the RBV, the right number of projects is the

balance between the resources available from different functional areas and the resources

demanded by the projects (Cooper et al., 2004). Rothaermel et al. (2006) found an inverted U-

shape relationship between the size of a firm’s product portfolio on new product success and

firm performance. In line with the KBV it is argued that a mix of different knowledge stocks

enriches the firm’s ability to expand the product portfolio and offers a variety of related

products to meet consumer demand (Brown & Eisenhardt, 1997). A large portfolio leads to

synergistic effects such as economies of scope and scale due to knowledge spillovers in

production, marketing and distribution, so the production costs are decreased, and product

variety is increased (Kotha, 1995). However, an increase in the product portfolio could lead to

29

information overload, which has been found by firms with more diverse product portfolio’s

(Hoskisson & Hitt, 1994). When managers are not able to efficiently coordinate the portfolio,

new products will suffer from poor quality, lack of differentiation which will ultimately

influence firm performance (Rothaermel et al., 2006).

The findings from the APM strengthens the statement which has already been made by Cooper

et al. (2004) that selecting the right number of projects are a prerequisite for successful portfolio

composition. The APM literature and recent research by Rothaermel, et al. (2006) extended the

work of Cooper et al. (2004) that the optimal portfolio size cannot only be determined from a

resource-based perspective. Increasing portfolio size leads to interdependencies; we know from

the previous section that interdependencies makes the overall value of the portfolio greater

(synergies) or smaller (conflicts). However, at a certain point situations of information overload

and managerial complexity could limit the potential of increasing portfolio size. I propose that:

Proposition 3: Selecting the right number of projects for the portfolio is determined by a fit

between the available resources within the organization and resources demanded by the

projects, managerial capability to cope with diverse information, and the positive

interdependencies (synergies) between the projects.

Future research on portfolio size in NPPM

Cooper et al. (2004) was the only researcher in NPPM who investigated portfolio size. Based

on the reasoning in the APM literature I found that the suggestion which has been made by

Cooper et al. (2004) was incomplete. Portfolio size should not only be determined by a resource

fit, but also by the interdependencies and managerial capability to cope with diverse

information. Future research is needed to empirically test this proposition. Also, future research

could investigate what the influence is of increasing or decreasing the size of the portfolio on

innovation/financial performance. The study of Lahiri and Narayanan (2013) studied the

influence of increasing alliance portfolio size on firm and innovation performance, similar

research can be conducted in the NPPM literature.

4.2.4. Balance

Wassmer et al. (2017) argued in their study that a balance between cost reduction and revenue

enhancing strategy will lead to better firm performance, since exploitative and explorative

alliances lead to synergy (i.e. resource complementary effects). From an RBV perspective,

30

firms utilize strategic resources to enhance their product offering (Wassmer et al., 2017).

Product market extension aims to enhance revenues by entering new lines of business and

efficiency improvement focuses on enhancing the productivity of existing assets and aims at

cost reduction (Koza & Lewin, 1998). Based on the concept of resource ambidexterity, to

survive in the long-term firms should pursue dual objectives simultaneously to cope with

environmental change (O’Reilly & Tushman, 2013).

To survive in the long-term firms should pursue dual objectives simultaneously to cope with

environmental changes (O’Reilly & Tushman, 2013). An alliance strategy can be an important

alternative to internal resources for attaining those dual objectives (Wassmer et al., 2017).

Based on data from the global airline industry, a balance between revenue enhancing

(exploration) and cost reduction (exploitation) partners in the alliance portfolio enhances firm

performance (Wassmer et al., 2017).

Comparing balance with NPPM

In the NPPM literature, balance is identified by Cooper et al. (1999) as a prerequisite for

successful portfolio composition. Bauer and Leker (2013) provided empirical evidence for the

importance of a balanced portfolio, they did research towards the effects of balancing R&D

budget allocation between exploratory and exploitative innovation activities on new product

performance. Exploration activities are ones which refer to a firm’s ability to create products

that are entirely new to the company’s product portfolio (March, 1991). Exploitation in R&D

refers to a firm’s ability to improve the products that already exist in their portfolio (Bauer &

Leker, 2013). They found that product performance is positively influenced by the simultaneous

pursuit of explorative and exploitative innovation activities for both product and process

innovations.

The introduction of the concept of ambidexterity by Tushman and O’Reilly (2013) made it clear

that firms should pursue both exploratory and exploitative activities, since they result in

synergistic effects. Prove is given by Wassmer et al. (2017) for APM literature and by Bauer

and Leker (2013) for the NPPM literature that ambidexterity in the portfolio leads to better firm

and product performance respectively.

The alliance portfolio management literature regarding balance does not provide new insights

regarding balance in the new product portfolio. However, returning to the findings of

Yamakawa et al. (2010) regarding diversity in explorative and exploitative alliances, I want to

point that resource ambidexterity differs as the firm matures. Yamakawa et al. (2010) found

that younger firms benefit more from exploitative alliance in their portfolio, while older firms

31

benefit more from a higher ratio of exploration alliances. In line with the reasoning of

Yamakawa et al. (2010) similar propositions can be made for NPPM. Younger firms have

limited internal resources (i.e. financial capital) and capabilities. Therefore, younger firms

cannot compose their portfolio with a high share of explorative projects since they involve

higher risk. Therefore, younger firms should compose a product portfolio of exploitative

projects to create a solid resource base and need to develop capabilities to effectively manage

the portfolio. Exploitative projects refer to projects which a firm is experienced with and that

already exists in the current product portfolio (March, 1991). Once the firm is successful in its

exploitative projects it can grow by increasing the share of explorative projects in their

portfolio. Explorative projects are projects which are new to the portfolio, they involve higher

risk and potentially larger payoffs than exploitative projects (Bauer & Leker, 2013). I propose

that:

Proposition 3: Young firms should have a higher ratio of exploitative projects (compared to

explorative) in their new product portfolio, whereas older firms should have a higher ratio of

explorative (compared to exploitative) projects in their new product portfolio

Future research on balance in NPPM

Since it is proposed that young firms should have a higher ratio of exploitative projects

(compared to explorative) in their new product portfolio and older firms should have a higher

ratio of exploratory (compared to exploitative) projects in their new product portfolio, future

research needs to examine whether this propositions hold for the NPPM literature. This can be

done by using the same research method as Yamakawa et al. (2010) used. A quantitative study

could compare portfolios with different ratios of exploratory/exploitative projects on firm

performance, and thereby using firm age as a boundary condition.

4.2.5. Strategic Fit

Hoffman (2005) identified in his paper the tasks of an alliance portfolio manager. One of these

tasks comprises the development and implementation of a portfolio strategy. A portfolio

strategy is the main strategic direction for all alliances in a particular business unit and

encompasses the rules for managing all the alliances of the entire company (Hoffman, 2015).

Based on interviews in twenty-five leading European corporations the strategic alignment of

the alliance portfolio takes place at the business level. At this business unit level, the tasks of

32

alliance strategy are to strategically align all alliances of a business unit with the business

strategy.

Alliances strategies can also be used to balance the trade-off between exploration and

exploitation (Hoffmann, 2005). The alliance strategy is accountable for the number, spread,

redundancy and linkage strength of the company’s interorganizational relationships in order to

contribute to its business strategy. The configuration of the alliance portfolio depends on its

strategic objective, in case of an exploration strategy the portfolio will be filled with many

diverse partners, whereas an exploitation strategy only needs a few alliances with similar

partners (Hoffmann, 2005).

Hoffmann (2007) states that firms should take a contingency perspective regarding the role of

alliance portfolios in enabling a fit between internal resource endowment of a firm and external

requirements it faces. The contingency theory assumes that the structure and strategy of an

organization must fit with external environmental conditions, internal resource endowments,

and firm strategy to positively influence firm performance.

Comparing strategic fit with NPPM

In NPPM strategic alignment is the extent to which the NPD portfolio is in line with the strategic

aspirations of the firm (Cooper et al., 2001). Each individual project should fit with specific

market or technology areas as defined by the firm’s innovation strategy (Kester et al., 2014).

Also, a strategically aligned portfolio should have projects incorporated which are in line with

the firm’s strategic goals. To give an example; firms who want to enter new markets should

have projects in their portfolio that addresses that market opportunity (Kester et al., 2014).

Finally, the budget allocation across the multiple projects gives a good indication of the

importance of each market or technology area in achieving a firm’s strategic objectives.

Whereas, the alliance portfolio management literature does not provide any new insights for

strategic fit in NPPM, it strengthens the NPPM literature by confirming that individual projects

and the whole portfolio should be aligned with the firm’s strategy. As mentioned in the APM

literature, the alliance strategy can be used to balance the trade-off between exploration and

exploitation alliances. We know from the balance section that organizations should move to

ambidextrous organizations. By strategically aligning the goals of the firm with the goals of the

portfolio, strategic fit ensures that the portfolio will consist of both explorative and exploitative

projects. Having explorative and exploitative projects in the portfolio eventually lead to

synergistic effects which will increase the value of the project’s portfolio.

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Table 6 summarizes the findings in a complete overview of the characteristics for successful

new product portfolio composition. Based on the findings from this literature review the new

product portfolio should be composed based on these six characteristics. Future research is

needed to test the applicability of these characteristics in the NPPM literature.

Figure 6: Composition characteristics for successful new product portfolio composition

•A strategically aligned portfolio should have projects incorporated which are in line with the firm’s strategic goals (Kester et al., 2014; Hoffman, 2015)

Strategic Fit

•A balanced porfolio consists of exploratory and exploitative projects, have a ratio between short- and long-term projects, projects should be distributed according to the various NPD-Stages (Cooper et al., 1999; Tushman & O'Reilly, 2013)

•New finding: Younger firms should have a higher ratio of exploitative compared to exploratory projects in the portfolio. Older firms should have a higher ratio of exploratory compared to exploitative projects in their portfolio

Balance

•The portfolio has an "optimal ratio between resource input and return" (Kester et al., 2014, p. 329).

Value maximization

•Selecting the right number of projects is determined by a fit between resources demanded by the projects and resources available in the organization (Cooper et al., 1999)

•New finding: Selecting the right number of projects for the portfolio is determined by a fit between resources available by the organization and resources demanded by the projects, managerial capability to cope with diverse information, and the positive interdependencies (synergies) between the projects.

Seleting the right number of projects/Size

• New finding: Synergies between the projects should be maximized and conflicts should be avoided

Interdependencies

•New finding: The portfolio should have an intermediate level of diversification between the projects. •New finding: Managers must follow a contingency perspective regarding the implementation of the different forms

of diversity in the new product portfolio

Diversity

Successful New Product Portfolio Composition

34

5. Conclusion In this thesis I tried to identify characteristics for successful portfolio composition in different

portfolio management streams which could extend the current NPPM characteristics. The

literature review is based on 28 papers from the APM literature and identified two

corresponding characteristics for successful portfolio composition. This thesis also found new

insights regarding the composition characteristics balance and size.

First, it is stated in the APM literature that alliances should be strategically aligned with the

firm’s strategic objectives. The concept of strategically aligning the new product projects with

the firm’s objectives is already found in the NPPM literature to be a prerequisite for successful

portfolio composition, the findings from the APM literature strengthens this.

Second, the alliance literature acknowledges what already has been found in the NPPM

literature regarding balance, namely that the portfolio must consist of a balance between

exploratory and exploitative projects. However, the APM literature provided additional insights

for NPPM by arguing that the balance between explorative and exploitative projects is

influenced by the age of the firm. Younger firms should have a higher ratio of exploitative

compared to explorative projects in their portfolio since they do not possess the required

resources and capabilities to cope with the higher risk of explorative projects. Once the firm is

more experienced in its exploitative projects it can grow by increasing the ratio of explorative

projects.

Third, portfolio size is already recognized in the NPPM literature as a prerequisite for successful

portfolio composition. The findings from the alliance literature provides a better understanding

on how the optimal portfolio size should be determined. The NPPM literature argues that the

optimal portfolio size is determined by the fit between the available resources and the resources

demanded by the projects. The APM literature showed that an increase in portfolio size

increases managerial complexity due to information overload. Moreover, increasing portfolio

size leads to interdependencies from which we know those leads to synergies or conflicts.

Therefore, selecting the right number of projects for the portfolio is determined by a fit between

resource available and resources demanded, managerial capability to cope with diverse

information, and the positive interdependencies (synergies) between the projects.

Fourth, the APM literature argues that the interdependence between projects in the portfolio

results in synergies or conflicts, which makes the value created by a portfolio greater or smaller

than the sum of the values by each individual alliance in the portfolio. The portfolio must be

composed in such a way that it maximizes synergies and avoids conflicts between projects.

35

Therefore, interdependencies are seen as an additional characteristic for successful NPPM

composition.

Finally, diversity is a multi-dimensional concept with different performance implications in

APM. RBV and KBV arguments state that diversity is beneficial since it leads to novel resource

and knowledge recombination. However, according to the attention-based view, too much

diversity hampers the positive effects since managers’ bounded rationality limits their ability

to cope with diverse information. Therefore, intermediate level of diversity is identified as an

additional characteristic for successful portfolio composition. Managers must follow a

contingency approach regarding the role of the different diversity forms in the new product

portfolio. First, if firms want to overcome the problem of learning traps they should have a

technological diverse portfolio. Second, a functional diverse portfolio is beneficial when firms

want to improve the ratio of exploratory projects. Older firms are better able to reap the benefits

of a functional diverse portfolio since they possess the required resources and capabilities to

deal with the increased complexity created by this functional diversity. More research is needed

to investigate whether governance diversity in exploratory and exploitative projects is

beneficial.

36

6. Implications

6.1 Theoretical implications and recommendations

This research contributes to the NPPM literature by providing two additional characteristics for

successful new product portfolio composition and creates a better understanding of the already

identified portfolio characteristics as identified by Cooper et al. (1999). The findings of this

literature review contribute to the NPPM literature by arguing that the new product portfolio

must be composed and evaluated based on six characteristics: value maximization, strategic fit,

balance, diversity, selecting the right number of projects/size, and interdependencies.

The first identified composition characteristic from the alliance literature is diversity. Whereas

the concept of diversity is relatively unexplored in the NPPM literature, I was able to propose

that at an intermediate level, diversity can be seen as an additional characteristic for new product

portfolio composition. Managers must take a contingency approach regarding the role of

diversity in the new product portfolio. If firms want to overcome the problem of learning traps

they need to focus on creating a technological diversified portfolio. If firms want to increase

their share of exploratory projects, it would be better to have a functionally diverse portfolio.

Due to the high complexity of managing a functionally diverse portfolio, I argued that older

firms are better able to cope with a diverse portfolio due to their routines. Future research needs

to investigate the different forms of diversity in NPPM and test whether the different diversity

forms in the portfolio influences each other.

Second, interdependencies are identified as a second additional characteristic for successful

new product portfolio composition. Interdependencies are identified in both the alliance

portfolio management and NPPM literature as making the value of the portfolio greater or

smaller than the sum of the individual alliances or projects. Interdependencies are investigated

in the NPPM literature by Elonon and Arotto (2003) and they stated that the links between

projects in the portfolio are not considered systematically due to complexity and lack of

knowledge. The interdependencies described in these articles are described as reactive events.

Interdependencies occur as a consequence of the interplay between projects. However, the goal

of this study was to identify characteristics for successful portfolio composition, therefore

future research should investigate the characteristics that maximize synergy effects in the new

product portfolio. This could be done by quantitatively examining what type of projects results

in synergies and conflicts, thereby creating a guideline for firms to show how they can

maximize upfront synergies between projects.

37

This thesis also contributes to the work of Cooper et al. (1999) in the NPPM literature by

creating a better understanding of the already identified portfolio characteristics: balance and

size. The alliance literature and the NPPM literature agreed on the fact that organizations need

to balance the portfolio between exploitative and explorative projects. The alliance literature

additionally showed that the ratio between explorative and exploitative projects is influenced

by the age of the firm. Younger firms are expected to benefit more from a higher ratio of

exploitative projects compared to exploratory projects, whereas older firms benefit more from

a higher ratio of explorative projects compared to exploitative projects. This effect is only

investigated in alliance portfolios, therefore future research in NPPM could empirically

investigate whether these statements actually hold for the new product portfolios. Also, future

research needs to identify the required resources and capabilities that are needed to increase the

share of exploratory projects.

Furthermore, the APM literature provided an important extension on Cooper et al. (1999)

statement that selecting the right number of projects for the new product portfolio is determined

by the resource available by the organization and the resource demanded by the projects. This

statement is extended with the KBV arguing that increasing portfolio size leads to novel

knowledge recombination, but situations of information overload and managers’ bounded

rationality diminish the positive effects of an increased portfolio size (Bos et al., 2017). On top

of that increasing portfolio size leads to interdependencies which can result in redundancy in

the portfolio whereby the same projects compete for resources that are scarce available (Hoehn-

Weiss et al. 2017). Empirical research is needed to test this proposition, moreover future

research could also investigate what the effects are of increasing/decreasing the new product

portfolio on firm performance.

38

6.2 Managerial implications

This thesis provides managers two additional characteristics to consider when they compose

their new product portfolio: diversity and interdependencies. It was found that at intermediate

levels of diversity, projects in the new product portfolio benefit from resource and knowledge

recombination’s. Managers need to take a contingency approach regarding the implementation

of different forms of diversity in the new product portfolio, also keeping in mind that only

intermediate levels of diversity will be beneficial. Technological diversity is needed to

overcome learning traps. Functional diversity is preferred when the firms need to strengthen

their exploratory projects. Older firms are better able to handle a functional diverse portfolio

and need to have a higher ratio of exploratory projects compared to exploitative projects in the

portfolio. On the other side, younger firms should have a higher ratio of exploitative projects

compared to exploratory projects in their portfolio. interdependencies between projects results

in synergies or conflicts, such as complementarities or resource constraints which also

influences the optimal size. On top of that, this research was able to show how managers can

determine the optimal size for the portfolio. Whereas it was initially suggested that selecting

the right number of projects is determined by a fit between the resources demanded by the

projects and the resources available by the organization, managers must take into account the

role of information overload and interdependencies between projects. Increasing the size of the

portfolio will lead to extra information on which decisions need to be based. Depending on the

ability of managers to cope with this extra information, increasing the size will be beneficial or

not.

39

7. Limitations The first limitation of this study concerns the systematically of literature review. While the

APM literature is systematically selected and analyzed, this was not the case for the NPPM

literature. Possibly more relevant articles about NPPM could have been found if the selection

of those articles was performed systematically.

The second limitation of this study concerns the chosen research method. Since this study is

based on a systematic literature review this study can only make propositions and

recommendations for future research. The comparison is made between alliance portfolio

management and new product portfolio management literature, despite the similarities between

those literature streams it does not mean that results from one stream of literature are replicable

to the other field of research, therefore future research is needed to empirically test the

propositions. Furthermore, the research in the alliance literature is mainly conducted in fast-

paced industries (pharmaceutical industry and airline industry), since it was found that firm age

influences the ratio of exploratory and exploitative projects in the portfolio, it could also be the

case that the type of industry influences the composition of the portfolio. Therefore, to test

whether the propositions accounts for the NPPM literature research must be conducted in both

slow-changing and fast-paced industries.

40

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Appendix

Appendix 1: Overview findings categorized per composition characteristic

Composition Characteristic Findings Technological diversity Wuyts & Dutta (2014) Found a U-shape relationship between portfolio diversity on

superior product innovation Van de Vrande (2012) Found an inverted U-shape relationship in technological proximity

between the focal firm and its partners on innovation performance Subramanian & Soh (2017) Found a positive influence of technological diversity of the alliance

portfolio on the breadth of recombinant innovation Marhold & Kang (2017) Found that increasing internal diversity of the technological

resources negatively influences the diversity of the portfolio Partner type diversity de Leeuw et al. (2014) Found an inverted U-shape relationship between APD and radical

innovative performance Found a positive relationship between APD and incremental innovative performance Found an inverted U-shape relationship between APD and productivity

Hagedoorn et al. (2018) Found an inverted U-shape relationship between partner type variety in the alliance portfolio and innovation performance

Functional diversity Wagner & Zidhorn (2017) Found a negative relationship between APD and innovation output Jiang et al. (2010) Found a positive relationship between APD and firm performance Beers & Zand (2013) Found a positive effect between APD and innovation performance.

This effect is higher for radical performance instead of incremental performance

Cui & O’Connor Found that diversity of functional activities in a portfolio negatively moderates with alliance portfolio resource diversity and firm performance.

Industry diversity Jiang et al. (2010) Found a U-shaped relationship between industry diversity and firm

performance Governance diversity Jiang et al. (2010) Found a negative relationship between governance diversity and

firm performance Partner relevance diversity Hagedoorn et al. (2017) Found an inverted U-shape relationship between partner type

relevance and innovation performance Exploration vs Exploitation diversity

Yamakawa et al. (2010) Found that firms who have more exploitative alliances have a higher firm performance in the near term Younger firms benefit more from exploitation alliances in their portfolio

49

Older firms benefit more from a higher ratio of exploration alliances in their portfolio

Interdependencies Degener et al. (2018) Found that firms realize innovation benefits from ADP only when

they focus on and apply coordination or partner selection routines to manage these alliances

Agari et al. (2017) Found that reconfiguration is needed as a consequence of a technological discontinuity (complementing alliances or terminating alliances).

Hoehn-Weiss et al. (2017) Found that greater redundancy among partners within the alliance portfolio, the worse the focal firm’s performance

Alliance portfolio size Lahiri and Narayanan (2013) Found an inverted U-shaped relationship between APS and

innovation/financial performance Wagner & Zidhorn (2017) Found a positive relationship between APS and innovation output Bos et al. (2017) Found a hampered effect of APS on the relationship between

alliance portfolio concentration and MNC performance Faems et al. (2013) Stated that with increasing levels of innovation, the positive impact

of increasing APS on financial performance is dampened Balance Wassmer, et al. (2017) A balance between cost reduction and revenue alliances strategies

in the alliance portfolio will lead to better firm performance Strategic Fit Hoffman (2005) Firm should take a contingency perspective regarding the role of

alliance portfolios in enabling a fit between internal resource endowment and external requirements

50

Appendix 2: Analysis individual articles

Title Alliance Concentration in Multinational Companies: Examining Alliance Portfolios, Firm Structure, and Firm Performance

Authors Bos, Faems, Noseleit

Year 2017

Composition characteristic

AP Size

Motivation Explore if the distribution of alliances across focal firms' internal structure influences how firms can benefit from alliances by knowledge recombination. Because often firms consist of multiple, geographically dispersed units.

Data collection timing

2000-2010

Sample size 32 firms

Research method

Quantitative

Management theory

Knowledge-Based View

Discipline Management

Segment Multinational Pharmaceuticals

Region Global

Relevant research objective

Does the more alliance portfolios are concentrated with a limited #geographic unit of the firm --> + firm performance? Might be limited by portfolio size (hard to identify, assimilate, and exploit the locally available knowledge).

Relevant variables

• Alliance portfolio size (sum of all operational alliances)

Relevant findings • Size --> - moderates the 'alliance portfolio concentration > FP' relationship.

(Less than five alliances are positive, more than 26 is negative) With small alliance portfolios recombination can be triggered.

Relevant limitations

Non

Title Alliance Portfolio Configurations and Competitive Action Frequency

Authors Andrevski, Brass, Ferrier

51

Year 2016

Composition characteristic

Diversity (industries of partners, diversity between partners/structural holes)

Motivation What is the optimal alliance portfolio configuration of attributes that would maximize the firm's ability to win from the competition?

Data collection timing

1988-2013

Sample size 12 firms

Research method

Quantitative

Management theory

Configurational approach (network & relational)

Discipline Management

Segment Automobile manufacturing

Region Global

Relevant research objective

How do alliance portfolio attributes (relational/structural) help to reach network resources and affect competitive action frequency (=better than sum to win from competition)? Advent. APM: opportunity recognition, opportunity development and action execution. High level of the attributes (structural holes, R&D alliances, and equity alliances) will lead to increased competitive action frequency for strategic actions (= more winning from the competition).

Relevant variables

• R&D alliance scope (#industries in which automakers have formed R&D alliances, shows the breadth of new knowledge);

• Structural holes (looking at the partners of X, and if their partner Q also has connection with J)

Relevant findings

• Broad technological knowledge -->+ new innovation by mixing and matching components.

• Wide R&D alliance scope -->+ creating broad technological knowledge enables firms to recognize new ideas and create the capacity of opportunity development.

But, only if in combination with structural holes & equity alliances.

Limitations The influence of competition and strategic affects has not been examined but could be interesting.

Title Alliance Portfolio Diversity and Firm Performance: Examining Moderators

Authors Collins, Riley

52

Year 2013

Composition characteristic

Diversity (alliance partners, functional, governance)

Motivation There were mixed findings related to the moderating factors of alliance portfolio characteristics on firm performance

Data collection timing

1999-2004

Sample size 300 firms

Research method Quantitative

Management theory

Not specified

Discipline Management

Segment Standard & Poor's 500 firms

Region Global

Relevant research objective

This study examined the relationship between alliance portfolio diversity and firm performance and tries to understand the moderating roles of reciprocity and status similarity on firm performance.

Relevant variables

• Firm performance (return on assets); • Alliance portfolio diversity (diverse knowledge); • Status similarity (#direct relationship in portfolio)

Relevant findings • Alliance portfolio diversity inverted U-shape --> firm performance. • Reciprocity (+) and status similarity (-) moderate --> alliance

portfolio diversity-performance relationship.

Limitations They had no control of technological complexity in their research;

Title Alliance Portfolio Diversity and Firm Performance

Authors Jiang, Tao & Santoro

53

Year 2010

Composition characteristic

Diversity in five different types: industry; national; organizational; functional; governance.

Motivation Focus on the composition of the portfolio looking at the alliance partners.

Data collection timing

1985-2005

Sample size 138 firms

Research method Quantitative

Management theory

Resource-Based view

Discipline Management

Segment Automobile industry

Region Global

Relevant research objective

This article examines the relationship of different forms of diversity (industry, organizational, national, functional and governance) on firm performance

Relevant variables • Firm performance (measured in net profit);

Relevant findings • Partner industry diversity: U-shaped relationship --> FP; • Organizational diversity: J-shaped relationship +--> FP; • Functional diversity: (if it results in explorative and exploitative

portfolio)+--> FP; • Governance diversity: - --> FP;

OD & FD capture learning and resource access benefits.

Limitations One industry design limits the generalizability

Title Alliance Portfolio Diversity and Innovation: The Interplay of Portfolio Coordination Capability and Proactive Partner Selection Capability

Authors Degener, Maurer, Bort

54

Year 2018

Composition characteristic

Interdependencies (overlap, synergy on diversity)

Motivation Are there specific alliance management capabilities that positively influence the alliance diversity-FP relation?

Data collection timing

2014

Sample size 132 firms

Research method

Quantitative

Management theory

Resource-Based View

Discipline Management

Segment Biotechnology industry

Region Germany

Relevant research objective

Researches relation between APD and innovation performance; & portfolio coordination capability as moderator (because it creates attention for identifying interdependencies between alliance partners, determining areas of synergy, and synchronizing activities across alliance partners)

Relevant variables

• Innovation Performance (patent applications); • Alliance portfolio diversity (organizational diversity); • Alliance coordination capability (measuring if companies focus on

synergies, interdependencies and overlaps)

Relevant findings

• Coordination in the portfolio on these topics (synergies, interdependencies, overlaps) -->+ APD.

Coordination makes organizations able to benefit from highly diverse portfolios. These results show why some companies can better use their resources and that the value can be more than the sum.

Limitations Small high-tech companies have pressure to innovate, maybe different than larger companies.

55

Title Alliance Portfolio Reconfiguration Following a Technological Discontinuity

Authors Asgari, Singh, Mitchell

Year 2017

Composition characteristic

Interdependencies (complement/ substitute)

Motivation Limited understanding of the pressures to reconfigure alliance portfolio that arise when firms form new alliances

Data collection timing

1990-2000

Sample size 285 firms

Research method

Quantitative

Management theory

Resource-Based view

Discipline Management

Segment Biopharmaceutical firms

Region Global

Relevant research objective

Reconfiguration might be needed: (1) complementarity alliances to higher the value more than the total sum; (2) substitution leads to terminating in order to create room for new alliances. Technological discontinuity changes the value of resources in the following ways: new, reinforced, challenged, obsolete, unaffected. How does this work?

Relevant variables

Dependent and explanation variable is the #alliances counted per different resource type effect (reinforced etc.)

Relevant findings

Reconfiguration of the portfolio is important for firms to respond to changes. This means adding complementary alliances to strengthen other alliances, or terminating substitute alliances, even resources otherwise unaffected by the discontinuity, to free alliance capacity.

Limitations Correlations are researched, and not causal influences. However, they highlight important patterns in the reconfiguration of alliance portfolios.

56

Title Alliance Portfolio Resource Diversity and Firm Innovation

Authors Cui & O'Connor

Year 2012

Composition characteristic

Resource diversity

Motivation In the past research has not focused enough how alliances within the portfolio can be used to create synergies and enhance innovation, rather than focusing on a single alliance.

Data collection timing

2005-2008

Sample size 85 firms

Research method

Quantitative

Management theory

Not specified

Discipline Marketing

Segment Fortune 1000, mixed

Region Global

Relevant research objective

The article looks into factors that create better information and resource sharing, where diversity in resources can lead to more innovation. This leads to conditions for a firm to benefit from diverse partner resources.

Relevant variables

• Innovation performance is self-assessed to Fortune standards; • Resource diversity: (industry diversity within alliances in portfolio); • Functional heterogeneity (# different activities involved in group of

alliances)

Relevant findings • Collaboration with diverse partners and having a portfolio with diverse partners --> + IP (because diverse resources create synergy)

• It is better to focus on a narrow range of activities (R&D, marketing etc.), this allows more effective knowledge flow among alliances. More heterogeneity of functional activities can cause complexity.

Limitations Different types of diversity can impact innovation performance differently and influence each other differently.

57

Title Alliance Portfolios and Innovation Performance: Connecting Structural and

Managerial Perspectives

Authors Faems, Janssens, Neyens

Year 2012

Composition characteristic

AP Size Interdependencies Diversity

Motivation Existing portfolios study only into either the structural or managerial perspective, they largely ignore the interactions between them

Data collection timing

2012

Sample size Not applicable

Research method Qualitative

Management theory

Structural & Managerial Perspectives

Discipline Organization Studies

Segment Not applicable

Region Not applicable

Relevant research objective

They connect alliance portfolio composition with alliance portfolio management and innovation performance. Found in literature a U-shaped relationship between size and performance.

Relevant variables

• Alliance portfolio size; • Innovation performance; • Alliance portfolio heterogeneity

Relevant findings • Portfolio size --> innovation performance (+ when there are interdependencies by complementarities & - when there are interdependencies by constraints);

• Heterogeneity -->+ innovation performance.

Limitations It is only a conceptual paper not based on empirical findings

58

Title Alliance Portfolios: A Review and Research Agenda

Authors Wassmer

Year 2010

Composition characteristic

Interdependencies AP Size

Motivation Since there are a broad range of perspectives of different theories and alliance portfolio related research, it is difficult to synthesize the existing insights and knowledge on the subject

Data collection timing

1988-2010

Sample size Not specified

Research method Qualitative

Management theory

Not specified

Discipline Management

Segment Not specified

Region Not specified

Relevant research objective

This article offers a review of the extant alliance portfolio literature and organizes it around three key dimensions: emergence, configuration and management.

Relevant variables

Not applicable

Relevant findings More empirical research should be performed on: Portfolio size --> (+/-) firm performance but can be outweighed by other factors. Interdependencies --> (+synergies; -conflicts) firm performance.

Limitations No empirical research

59

Title Balancing Your Technology-Sourcing Portfolio: How Sourcing Mode Diversity

Enhances Innovative Performance

Authors van de Vrande

Year 2013

Composition characteristic

Diversity (technological)

Motivation What interorganizational strategies that can be used to access external knowledge? They will use technological diversity and sourcing mode diversity as AP choices.

Data collection timing

1990-1997

Sample size 78 firms

Research method

Quantitative

Management theory

Not specified

Discipline Management

Segment Pharmaceutical firms

Region Global

Relevant research objective

Investing in a broader range of technologies avoids the danger of being locked in; having a variety of companies that differ on technologies -->+ firm's innovative performance. Benefits can be limited due to monitoring complexities.

Relevant variables

• Innovation performance (weighted patent counts); • Variance (relative technological proximity similarities of the focal firm

and its partners and innovative performance. )

Relevant findings • Variance in relative technological proximity - inverted U-shape --> innovative performance.

Limitations Diversity comes in many forms and not only technological.

60

Title Benefiting From Alliance Portfolio Diversity: The Role of Past Internal

Knowledge Creation Strategy

Authors Wuyts & Dutta

Year 2012

Composition characteristic

Diversity (technological)

Motivation What are the consequences of a diverse alliance portfolio?: Stimulate firm innovativeness, but difficult management structures and complex knowledge transfers.

Data collection timing

1985-1999

Sample size 52 firms

Research method

Quantitative

Management theory

Contingency perspective

Discipline Management

Segment Biopharmaceutical industry

Region Global

Relevant research objective

Will a diversified alliance portfolio -->+ (non-linear) superior product innovation? Because of new knowledge assimilation (new + past), it creates a broader perspective, creative thinking, helps to cope with scarcity and uncertainty. Non-linear: information overload, diseconomies of scale, hard to build relationships and coordinate.

Relevant variables

• Diversity (technological diversity in total #alliances); • Superior innovation performance (independent measurement of 'best-in-

class' drugs).

Relevant findings

• Diversified alliance portfolio U-shaped (not inverted) effect --> superior product innovation.

Means that high & low amount of diversity leads to superior product innovation.

Limitations There was no data on failed patents; and they didn't incorporate the costs of alliances. This might have caused the U-shape.

61

Title Determinants of Alliance Portfolio Complexity and Its Effect on Innovative

Performance of Companies

Authors Duysters & Lokshin

Year 2011

Composition characteristic

Diversity

Motivation The relationship between alliance portfolio complexity and innovative performance is relatively unexplored

Data collection timing

1998-2000

Sample size 334 firms

Research method Quantitative

Management theory Not specified

Discipline Innovation & Technology Management

Segment Random; large and small firms

Region Netherlands

Relevant research objective

Depending on the type of company (innovator or imitator) the alliance portfolio will be broader.

Relevant variables • Innovativeness (introduced products new to the market)

Relevant findings • Developing relations that bring access to new information --> + innovation;

• Intensive (exploitation) and/or broad (exploration) use of external information sources --> innovation.

Limitations

62

Title Diversity in Alliance Portfolios and Performance Outcomes: A Meta-

Analysis

Authors Lee, Husk & Madhavan

Year 2017

Composition characteristic

Diversity (multi-dimensional)

Motivation There is a theoretical tension between the benefits and costs of alliance diversity

Data collection timing

Not specified

Sample size 67 studies

Research method Meta-analysis: Quantitative

Management theory TCE, RBV, Knowledge and learning, social network theory

Discipline Management

Segment Not specified

Region Not specified

Relevant research objective

Using a meta-analysis this study investigates alliance diversity and its impact

Relevant variables • APD performance; • Firm performance

Relevant findings • Diversity: performance outcomes are not uniform across all diversity domains;

• Theoretical orientation: TCE and RBV demonstrate the strongest results when they employ the variety measure

Limitations

63

Title Effects of Extent and Diversity of Alliancing on Innovation: The Moderating

Role of Firm Newness

Authors Wagner & Zidorn

Year 2017

Composition characteristic

Diversity (functional)

Motivation The innovation effects of the extent and heterogeneity of alliances and the newness position of a firm are hardly investigated

Data collection timing

1980-2008

Sample size 20 firms

Research method

Quantitative

Management theory

Not specified

Discipline Innovation & Technology Management

Segment Biotechnology industry (young, high-tech)

Region Global

Relevant research objective

How does the combination of heterogeneity and the size of alliance portfolios relate to innovation output?

Relevant variables

• Innovation output (patents granted); • Diversity (functional heterogeneity)

Relevant findings

• Younger firms with more APD benefit more(in innovation output) than older firms with APD;

• Young firms are maybe more flexible and react better to challenges. And might also have more resource scarcity and have more synergy effects. They also benefit from "more" alliances (bigger portfolio size). The combination is only beneficial up to a certain point.

Limitations Only young high-tech firms; patent measures used which is not a perfect measure of innovation activity

64

Title Examining Alliance Portfolios Beyond the Dyads: The Relevance of Redundancy and Nonuniformity Across and Between Partners

Authors Hoehn-Weiss, Karim, Lee

Year 2017

Composition characteristic

Interdependencies

Motivation Interdependencies are critical determinants of whether the overall value that firms derive from their alliance portfolios is smaller or greater than the sum of the values derived from each individual alliance

Data collection timing

1998-2011

Sample size 59 firms

Research method Quantitative

Management theory

Resource dependence theory

Discipline Organization Studies

Segment Airline industry

Region U.S.

Relevant research objective

This article studies interdependencies at the alliance portfolio level

Relevant variables

• Performance (natural logarithm of carrier i's time ratio); • Redundancy within the portfolio (Burt measure)

Relevant findings • Redundancy --> - firm performance

Relevant limitations

Non

65

Title Exploration versus Exploitation in Alliance Portfolio: Performance

Implications of Organizational, Strategic, and Environmental Fit

Authors Yamakawa, Yang, Lin

Year 2010

Composition characteristic

Diversity (Exploration vs Exploitation)

Motivation It is not clear how and when strategic alliances carry positive implications for firm performance

Data collection timing

1988-1995

Sample size 95 firms

Research method Quantitative

Management theory

Resource-based view

Discipline Innovation & Technology Management

Segment Pharmaceutical, computer, food, steel and paper

Region Not specified

Relevant research objective

Under what conditions does a firm's alliance portfolio lead to superior performance?

Relevant variables • Firm performance (ROA); • Exploration alliance ratio (Total number of "exploration -

exploitation" formed / total number of exploitation alliances formed)

Relevant findings • Firms forming more exploitation alliances --> + Firm performance;

• Younger firms benefit more from a higher ratio of exploitation alliance. Older firms benefit more from a higher ratio of exploration alliances;

• Higher exploration alliance ratio leads to better performance in the short-term when combined with a differentiation strategy

Limitations

66

Title Heterogeneity, Diversity and Complementarity in Alliance Portfolios

Authors Cobena, Gallego, Casanueva

Year 2017

Composition characteristic

Diversity & Interdependencies

Motivation There is a controversy about what the best type of partner might be to improve the business performance

Data collection timing

2011-2012

Sample size 135 firms

Research method Quantitative

Management theory Resource-Based view & Network theory

Discipline Management

Segment Airline Industry

Region Global

Relevant research objective

Understanding the relations between three basic forms of alliance portfolio configuration (heterogeneity, diversity, complementary)

Relevant variables • Firm performance (operating results); • Heterogeneity (% of focal firm partners that belong to subsectors); • Diversity (coefficient expresses the extent to which the portfolio

members differs from each other’s); • Complementary (% of different destinations between each other that

the focal firm has with each of its partners)

Relevant findings • Resource complementary --> + operational performance; • Partner heterogeneity does not positively relate to company

performance or obtaining complementary network resources; • Diversity --> + performance and resource complementarities;

Limitations Very specific industry and only one resource type researched

67

Title How to Manage a Portfolio of Alliances

Authors Hoffmann

Year 2005

Composition characteristic

Strategic fit; Interdependencies

Motivation How does alliance portfolio management work and what do you have to do?

Data collection timing

Not specified

Sample size 25 firms

Research method Quantitative & qualitative

Management theory Relational view

Discipline Management

Segment Leading companies

Region European

Relevant research objective

What are the tasks of alliance portfolio management and how can they be performed effectively?

Relevant variables • Not applicable

Relevant findings • Alliances portfolio need to be aligned with the firm strategy; this decision should be made for each individual alliance;

• Need to avoid conflicts within the portfolio but create synergies. By synergies economies of scale can be created.

Limitations

68

Title Linking Alliance Portfolios to Recombinant Innovation: The Combined

Effects of Diversity and Alliance Experience

Authors Subramanian & Soh

Year 2017

Composition characteristic

Diversity (technological)

Motivation Earlier research did not focus on a specific type of alliance portfolio diversity (influence on performance) if alliance experience attained through learning between partners (explorative and exploitative alliances) positively moderates this specific type of APD-performance relationship.

Data collection timing 1990-2000

Sample size 222 firms

Research method Quantitative

Management theory Contingency perspective

Discipline Management

Segment Biotechnological industry

Region Global

Relevant research objective

Firm's alliance portfolio consisting of partners collaborating in diverse technological areas relation to the firm's recombinant innovation performance.

Relevant variables • Technological Diversity (Herfindahl index); • Breadth of recombinant innovation (the extent to which a firm's

successful patents cite patents from diverse technology classes)

Relevant findings • Technological diversity of a firm's alliance portfolio -->+ breadth of recombinant innovation.

Limitations patent data is used; did not take into account repetitive collaboration;

69

Title Partner Type Diversity in Alliance Portfolios: Multiple Dimensions, Boundary

Conditions, and Firm Innovation Performance

Authors Hagedoorn, Lokshin, Zobel

Year 2018

Composition characteristic

Diversity (partner type/partner relevancy)

Motivation Make a difference within diversity by focusing on two partner type diversities: (1) variety of partners in alliance portfolios (customer/supplier etc.) and (2) partner type relevance (focal companies need knowledge). They both trigger different type of knowledge sharing mechanisms: (1) exploit complementarities, (2) internalize the knowledge.

Data collection timing

1996-2010

Sample size 3000+ firms

Research method

Quantitative

Management theory

Knowledge-Based view

Discipline Management

Segment A large number of industries

Region Netherlands

Relevant research objective

The two-alliance portfolio partner type diversity (i.e., partner type variety and relevance) --> firm innovation performance? Expect U-shaped because diverse knowledge is beneficial but searching, monitoring and coordinating activities will limit the resources that a firm could otherwise allocate to those activities that directly generate innovation performance.

Relevant variables

• Innovation performance (new sales to total sales); • Diversity in partner type (customer, supplier etc.); • Relevance by manager self-assessment

Relevant findings

• Partner diversity --> inverted U-shape to innovation performance; due to increased cost of coordination.

• It is not a "one size fits all" approach but the choices but differs per industry.

Limitations It would be interesting to research the external influences of complexity and technological discontinuities on alliance portfolio effectiveness. Also, it is necessary to see what strategies could mitigate this diversity decrease after peak.

70

Title R&D Cooperation, Partner Diversity, and Innovation Performance: An

Empirical Analysis

Authors van Beers, Zand

Year 2013

Composition characteristic

Diversity (multi-dimensional)

Motivation Discusses different kinds of partner diversity (functional & geographical) and if they might have different impacts (radical/incremental) on firms' innovation performance.

Data collection timing

1994-2006

Sample size 12811 Dutch Firms

Research method

Quantitative

Management theory

Resource-Based view/Knowledge-Based view and Contingency perspective

Discipline Innovation & Technology Management

Segment Unclear

Region Netherlands

Relevant research objective

Partner diversity supports learning innovation skills; because of synergies and access to complementary and multi-disciplinary knowledge. This might contribute to the production and sales of innovative products.

Relevant variables

• Innovation performance (process & organizational); • External cooperation (y/n); • Partner diversity (experience, patents, IT, size, multinational, subsidy,

sector, year)

Relevant findings • Innovation activities collaborate with external partners --> + innovation performance and effect is stronger for radical then incremental.

• Functional diversity -->+ sales of radically new products per employee.

• Effects are stronger in high-technology and knowledge-intensive industries because of higher degrees of product complexity, market volatility, and riskiness/uncertainty of innovation projects in these sectors.

Limitations Moderators such as corporate strategy and organizational structure could be researched.

71

Title Resource Ambidexterity Through Alliance Portfolios and Firm Performance

Authors Wassmer, Li, Madhok

Year 2017

Composition characteristic

Balance

Motivation It is said that you need balance between revenue enhancing and cost reduction strategies; but is this balance also needed in a firm's alliance portfolio?

Data collection timing

1994-2008

Sample size 724 firm-year observations

Research method

Quantitative

Management theory

Resource perspective

Discipline Management

Segment Airline industry

Region Global

Relevant research objective

They argue that better balance between cost reduction & revenue enhancing strategy will lead to better performance. Does the portfolio size (#partners) and partner scope (range & variety of partners) condition this balance-performance relationship?

Relevant variables

• Proportion of partner resources (product extension and efficiency improvements);

• Balance (0 = perfect homogeneous, unbalanced partner resource stock > 1 perfectly heterogeneous balanced resource stock)

Relevant findings

• Balance of product-market extending and efficiency-improving alliance partner resources -->+ firm performance;

• Scope --> - balance-performance relation, size has no impact; • Resource balance at portfolio level helps improve performance but

accessing too many resources through just a few partners is counterproductive.

Limitations This article only focuses on horizontal alliances

72

Title Returns to Alliance Portfolio Diversity: The Relative Effects of Partner Diversity

on Firm's Innovative Performance and Productivity

Authors de Leeuw, Lokshin, Duysters

Year 2014

Composition characteristic

Diversity (partner type)

Motivation Previous studies: APD --> firm performance; but most of these studies have only focused on 1 performance measure.

Data collection timing

1996-2006

Sample size 11279 firm observations

Research method

Quantitative

Management theory

Not specified

Discipline Management

Segment Different

Region Different

Relevant research objective

Which level of APD is optimal for which performance dimension (radical, incremental innovation performance or productivity performance)? Different types of alliances can enhance a different type of performance. Ex: supplier collaboration -->+ exploitation; uni's -->+ enhance exploration. But, too much diversity will create information overload.

Relevant variables

• Productivity (sales per employee); • Radical (#really new products); • Incremental (# refinement products); • APD (different partner types like customer, supplier, uni etc.)

Relevant findings

• APD inverted U-shape --> radical innovation (requires focus); • APD inverted U (with early tipping point, earlier then radical) -->

productivity: less APD can realize high productivity; • APD inverted U-shape --> incremental innovation (tipping point is

higher than productivity)

Limitations No

73

Title Strategies for Managing a Portfolio of Alliances

Authors Hoffmann

Year 2007

Composition characteristic

Strategic fit

Motivation Seeks understanding to clarify which tasks the management of an alliance portfolio comprises and how these tasks can be performed effectively.

Data collection timing

Not specified

Sample size 2 cases

Research method

Qualitative/ In-depth study & Quantitative

Management theory

Not specified

Discipline Management

Segment Leading companies

Region European

Relevant research objective

What are the core tasks of multi-alliance management, and how do companies with multiple alliances carry out these tasks?

Relevant variables

• Portfolio strategy; • Portfolio monitoring; • Portfolio coordination; • Institutionalizing multi-alliance management

Relevant findings

• Developing and implementing alliance strategies and alliance policy have become routine in large companies and significantly affect their alliance activities. It is their job to align the alliance activities with corporate strategy/values.

• Coordination is needed to use synergies and avoid conflicts. Redundancy is costly but can confirm knowledge and makes sure you don't bet on one horse.

Limitations Small number of cases, not empirically tested

74

Title The Effects of Internal Technological Diversity and External Uncertainty on Technological Alliance Portfolio Diversity

Authors Marhold & Kang

Year 2017

Composition characteristic

Diversity (technological)

Motivation As it is important to understand the possibilities of alliances, they want to know how diversity and various factors, via the mediating effect on alliance portfolio diversity, affect the firms' financial and innovation performance.

Data collection timing

1990-2010

Sample size 171 firms

Research method

Quantitative

Management theory

Not specified

Discipline Innovation & Technology Management

Segment Semiconductor

Region U.S. listed

Relevant research objective

How do internal and external determinants influence alliance portfolio diversity? They suggest that internal technology diversity --> - to tech diversity of alliance portfolios.

Relevant variables

• Alliance portfolio diversity (technological diversity by patent data & Herfindahl Index);

• Technology diversity (Herfindahl index)

Relevant findings

• Internal diversity of technological resources -->- diversity of portfolio (firms that have different technological fields in their company will be less likely to follow the same strategy in building their alliance portfolio = ambidexterity).

Limitations Diversity is measured by patent-based indicators, which potentially disregard innovations that are not patented

75

Title The Evolution of Coopetitive and Collaborative Alliances in an Alliance

Portfolio: The Air France Case

Authors Chiambaretto & Fernandez

Year 2016

Composition characteristic

Environmental circumstances

Motivation Looking to RDT, market uncertainty drives changes in AP. Previous studies neglected the compositions dimensions: partner type and partner interactions and their relationship with market uncertainty and APM.

Data collection timing

2000-2011

Sample size Single firm

Research method Qualitative (Case-study)

Management theory

Resource dependence theory

Discipline Marketing

Segment Airline

Region France

Relevant research objective

This study explores the composition of an alliance portfolio (partner type & interaction) and its evolution over time with uncertainty influences.

Relevant variables

• Partner type (competitor or not); • Partner interaction (horizontal, vertical, mixed); • Market uncertainty (low-high-back to normal)

Relevant findings • Managers must configure portfolio to adapt to changing environment; • High market uncertainty --> firms modify the composition of their

portfolio and rely more on cooperative alliances than on collaborative alliances. They use more horizontal than vertical interactions.

Limitations Single-Case study

76

Title Value Creation in Alliance Portfolios: The Benefits and Costs of Network

Resource Interdependencies

Authors Wassmer & Dussauge

Year 2011

Composition characteristic

Interdependencies

Motivation Alliances can create value through leveraging supplementary and complementary resources, but the value can be reduced by substitutability in the portfolio. This combines value creating literature, RBV and cost of coordinating and controlling alliances.

Data collection timing

Not applicable

Sample size Not applicable

Research method

Qualitative

Management theory

Resource-Based view

Discipline Management

Segment Not applicable

Region Not applicable

Relevant research objective

Alliances portfolio management is used to create more value than the sum of the individual alliances. Under what conditions can firms influence the network resources they get from forming alliances with different partners?

Relevant variables

• Network resource interdependencies (#supplementary and #complementary resources in portfolio)

Relevant findings

• Portfolio fit -->+ FP; • Firms should pick network resources that provide not only a good fit with

their own resources but also with the other networks’ resources in their alliance portfolios to create more value. It's best when both on an individual as on portfolio level, good alliances are chosen.

Limitations Not tested empirically

77

Title Vertical Integration, Innovation, and Alliance Portfolio Size: Implications

for Firm Performance

Authors Lahiri & Narayanan

Year 2013

Composition characteristic

Alliance Portfolio Size

Motivation Firms with similar APS often experience heterogeneity in their performance outcomes

Data collection timing 1991-2002

Sample size 282 firms

Research method Quantitative

Management theory Contingency Perspective

Discipline Management

Segment Semiconductor Industry

Region Global

Relevant research objective

They investigate the effect of alliance portfolio size on innovation and financial performance

Relevant variables • Alliance portfolio size (#alliances); • Innovation performance (weighted #patent data); • Financial performance (net income); • VI (0 for one topic; 1 for two topics of collaboration)

Relevant findings • Vertical integrated firms are better in benefiting from increased APS in financial performance;

• Vertical separated firms than can better utilize increased APS in innovation performance

Limitations Single industry setting