As companies develop more and more collaborative inter-firm relationships with others on new product development, successful configuration and management of R&D alliance portfolios becomes even more challenging. This paper seeks to understand how different characteristics of a firm’s R&D alliance portfolio influence its ability to acquire external knowledge and how knowledge acquisition in turn influences the firm’s innovation outcomes. The central argument is that a firm’s R&D alliance portfolio strategy entails both knowledge structure benefit and relational benefit. Firms seek to achieve these two different types of benefits by bringing in different desired partners. As a result, a firm’s choice or preferences for different types of R&D alliance partners influence both the scope of external knowledge it is exposed to (knowledge structure benefit) as well as the partner’s willingness to share and the focal firm’s ability to absorb and learn from its partners (relational benefit). While certain strategies may offer firms’ the opportunity to achieve both types of benefits simultaneously, other strategies may force firms to choose one benefit over the other. In order to exploit the value of the acquired knowledge acquired from external partners, firms need to further apply this knowledge to come up with innovative products or services. Literature has further classified new product offerings into radical vs. incremental innovations based on their innovativeness and customer benefit increase. Due to the different characteristics and knowledge requirements for radical vs. incremental innovation, we investigate how different dimensions play differential roles in the development process of these two types of innovation. We empirically tested our hypothesis in the context of pharmaceutical industry with a panel data of 64 firms over 15 years. The statistical results largely support our hypothesis.

Vertical alliances for collaborative new product development in interfirm relationship have been an ongoing theme of strategy and marketing research to cope with fast changing environments, and to continuously innovate in the marketplace. However, no study has yet examind both direct and indirect effects of vertical alliances on new product performance under high technology turbulence. As alliance partners seek to enhance their collaboration and performance, the relational nature of business relationships and structural network positions can influence firm innovativeness and subsequent new product performance. Using survey data of 146 firms collected in Turkey, this study shows that while firms form stronger cooperation under conditions of high technology turbulence, the impact on firm innovativeness and new product performance is contingent upon network positions and information exchange. The findings indicate that indirect effects of vertical alliance portfolio and information exchange enhance new product performance through firm innovativeness. Vertical relationship structures facilitate firm innovativeness with enhanced exploration but may not have a positive direct effect on new product performance. Furthermore, the effect of information exchange on new product performance is contingent upon information exchange which enhances firm innovativeness.