Crossing the Industry-Line: Breakthrough Innovation through Cross-Industry Alliances with 'Non-Suppliers'

Past research on alliances has elaborated on the motives, determinates and benefits of cooperative relationships between firms Notwithstanding their benefits, alliances entail mutual dependence on partners' complementary resources, and this is particularly true for vertical R&D alliances, where the development of technological innovation depends largely on suppliers' R&D results In such settings, alliances may be prone to rigidities when it comes to developing breakthrough innovations This article illustrates how the automobile manufacture BMW mitigated its dependence on its established suppliers and engaged in a cross-industry alliance with a 'non-supplier' to successfully develop a breakthrough innovation Based on the case, we discuss the strategic and operational challenges inherent in cross-industry R&D alliances with non-suppliers Our findings imply that the success of cross-industry alliances depends on specific actions at the strategic and operational levels (C) 2010 Elsevier Ltd All rights reserved