Introduce the network perspective of strategic alliances.
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Demonstrate that more alliances mean more innovation, but only to a point.
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Show that too many alliances reduce breakthrough innovation.
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Show the value offered by university alliances, but also the dangers.
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Provide managers insights on how to manage their alliance ‘portfolios’.
Strategic alliances, in particular strategic alliances with universities, are widely thought to be beneficial to the drug discovery process. However, the discussion of alliances and their effect has tended to focus on single alliances and has ignored the fact that firms tend to participate in multiple alliances simultaneously. Here, we show the importance of adopting a portfolio perspective of strategic alliances. We build a model of the U.S. pharmaceutical industry, and show how 2298 alliances, announced over a 15-year period, impact the alliance portfolios of 324 pharmaceutical firms, and how that, in turn, impacts the breakthrough innovations that these firms produce. In doing so, we show the stengths and benifits of strategic alliances, but we also show the dangers of adopting a more the merrier approach to strategic alliance making.
