Patterns of alliances and acquisitions: An exploratory study

Abstract

This study examined how firms combine alliances and acquisitions in an exploration/exploitation framework. By conducting cluster analysis on a sample of 1270 acquisitions made by 836 firms, we first identified the patterns in alliance and acquisition activities undertaken by these firms. Five distinct patterns were identified: (I) low alliance–low acquisition, (II) low alliance–high acquisition, (III) high alliance–low acquisition, (IV) high alliance–high acquisition, and (V) medium alliance–very high acquisition. Next, we analyzed the different ways in which the two modes were interlinked within these five patterns for exploration/exploitation. Patterns III and IV appeared to involve both exploration/exploitation and mutually reinforce exploration/exploitation. In contrast, in the remaining patterns, the two modes appeared to be more loosely coupled with each other, with a focus on exploitation.