NO FIRM IS AN ISLAND: SUCCEEDING WITH ALLIANCES
High levels of uncertainty often lead businesses into predictable directions, many of them negative. Extreme risk aversion, pre-emptive layoffs, and a laser focus on the short term are all common examples. On the positive side is the forming of alliances, a move that has become increasingly popular during the pandemic. Partnering with other firms can help strengthen a competitive position by enhancing market power, increasing efficiencies, accessing new or critical resources or capabilities, and entering new markets.
“In many instances, alliances are not only the preferred method for growth, but also the only feasible one,” says Wharton management professor Harbir Singh. Consider the race for a COVID vaccine. Multinational pharma giants Pfizer and AstraZeneca, for example, respectively joined forces with BioNTech, a boutique German firm, and scientists at Oxford University. Singh, academic director of Wharton’s , says these partnerships were not altruistic, but instead based on self-preservation. “Improving your competitive position alone is often no longer an option. COVID has gotten companies to reexamine their footprint – they must consider how much they want to do in
