TCI 2015 Configuration of alliance portfolio for firm’s innovation in Eco-friendly car industry
1. Configuration of alliance portfolio for firm’s
innovation in Eco-friendly car industry
-HYUNDAI and TOYOTA
Parallel Session 1.5: Accelerating Cluster Growth in Asian Countries
3. Background
Bioplastic
Fusion of Bio &
Chemical Technology
• Solution for
climate change
issues
Eco-friendly
automobile material
The strategic
alliance is important
for securing original
technologies
1 2
3 4
1 Fusion of Bio & Chemical Tech.
Bioplastic is polymer that is made by
bio-processing with biomass
2 Solution for climate change issue
Reduce CO2 that is a major form of
global warming by using bio-based
renewable resources
3 Using for eco-friendly automobile material
TOYOTA actively use bioplastic for
production eco-friendly cars
4 Securing original technologies through
strategic alliance
TOYOTA took over PLA production
factory from SHIMADZU through a
strategic alliance
• Response the
international
environmental
regulation
4. Alliance
portfolio size
• No. of partners + No. of alliances
• Firms that have many partners obtain diverse technologies and knowledges
from supplier through a synergy effect(Shan et al. 1994; Mouri et al. 2012)
• A central firm that has more partners is in a good position to secure resources
and knowledges. Because a central firm’s centrality increases in the network by
their partners (Goerzen 2007)
Structural
dimension of
alliance
portfolio
• Strength of ties between the central enterprises and partners
• The strong tie which is confidence between a central firm and its partners have
less conflict and promote the exchange of complex knowledges(Ulrich Wassmer
2010; Changsu Kim et al 2007)
• The weak tie is likely to expand cooperation capability with various partners to
increase the flexibility of network and has an advantage on getting state-of-the-
art information about new market(Capaldo 2007)
Partner
dimension of
alliance
portfolio
• Technology similarity & Type of partners
• Firms sharing similar knowledge and technology with their partners will have
an easier working time but, when alliance partners are too similar, they cannot
effectively obtain new knowledge(Lan et al. 1998; Frankort et al. 2011)
• Various partner types have a rich resource pool and a large choice possibility
but, the cooperation costs may be increased by the conflict and complexity
with partners(Baum et al. 2000; Anna S. et al. 2012; Olerlemans et al. 2013)
Literature Review
5. Research question
1 What kind of alliance portfolio of TOYOTA that preoccupied eco-friendly car market?
2 Did TOYOTA gain any kind of business performance through strategic alliances?
3
What is the difference of the configuration of alliance portfolio between TOYOTA
and HYUNDAI in bioplastic industry for making eco-friendly car?
• A comparison of the configuration of alliance portfolio in TOYOTA and HYUNDAI
• I expect to draw a proper configuration of alliance portfolio for achieving business
performance in eco-friendly car industry
6. Method
Joint patent Configuration of alliance portfolio
Joint patents are assigned to and jointly
owned by more than one inventor
Bioplastics patents of
HYUNDAI and TOYOTA
Alliance portfolio size
Structural dimension of
alliance portfolio
Partner dimension of
alliance portfolio
No. of partners
No. of alliances
The proportion of
repeated partners
Technology similarity
Type of partners
50
223
11
155
HYUNDAI TOYOTA
No. of bioplastic patents
No. of total patents No. of joint patents
7. Result-Alliance portfolio size
1. Alliance portfolio size of HYUNDAI 2. Alliance portfolio size of TOYOTA
Number of partners: 1 (in 2007)→ 6 (in 2011)
Number of alliance : 1 count of alliance with 1
partner (in 2007) → 11 counts of alliance with 6
partners (in 2011)
In early stage, TOYOTA had few partners but in
active R&D collaboration
Numerical increment of partners & a steady decline
in the number of alliances (after 2008)
The portfolio size has changed to an expanded
form of increase in both the number of partners
and alliances
8. Result-Structural dimension of alliance portfolio
HYUNDAI’s Partnership continuity
The inflow of new partners is reduced partnership continuity of HYUNDAI
The network flexibility is increased through the inflow of new partners (in 2011)
HYUNDAI have the alliance portfolio that consists of the high proportion of weak ties
9. Result-Structural dimension of alliance portfolio
TOYOTA’s partnership continuity
Cyclically repeated strong ties and weak ties
Most of the strong tie is with SHIMADZU
TOYOTA took over bioplastic production factory from SHIMADZU in 2002
10. Result-Partner dimension of alliance portfolio-HYUNDAI
HYUNDAI and their partners’ technology similarity = 25%
Cooperation with large firms at the rate of 70% and with universities at the rate of 30% (as of 2011)
11. Result-Partner dimension of alliance portfolio-TOYOTA
TOYOTA and their partners’ technology similarity = 31%
Mostly cooperate with large firms, other partner types occupy small portion in alliance portfolio
Since 2008, for the first time, the universities participated in TOYOTA’s alliance portfolio and they gradually
have increased their portion in the network
12. Discussion
HYUNDAI
Alliance portfolio size was
expanded by the increment
of partners and alliances
Large alliance configuration
size with a number of
partners and alliances
partnership continuity declined
in 20%
partnership continuity cyclically
increase and decrease
In 2009, cooperation with new
partners for production interior
material (that made by PLA) of
eco-friendly hybrid cars
• Focus on the cooperation with
existing partners until TOYOTA
obtain the necessary know-
how and technologies
• When TOYOTA need new
knowledge and technology,
they form new partnership
with new partners
• technology similarity = 25%
• cooperation with large firm
= 70%
constantly cooperate with KIA
that have a same goal with
HYUNDAI for the production of
eco-friendly car
• technology similarity = 31%
• high rate of cooperation with
large firm but, TOYOTA also
cooperates with other partner
types
• An increment in the
cooperation with universities
• Also other new partner types
can join in the network because
of TOYOTA have the stable
structure of alliance portfolio
Alliance portfolio size Structural dimension Partner dimension
TOYOTA
13. 1
• TOYOTA have secured the original technology by cooperation with SHIMADZU
that are bioplastic production company
• HYUNDAI cooperate with KIA that are automobile manufacturer like HYUNDAI
Like in the case of TOYOTA, HYUNDAI have to form the strong ties with
chemical companies that produce bioplastic for securing bioplastic original
technologies
2
• HYUNDAI have to do R&D collaboration not only with large firms but with small-
medium firms, universities, research institutes
By the same strategy, TOYOTA have secured bioplastic original technologies and
has enjoyed the dominant position in world bioplastic market
3
• As suggested in our findings, The result of analysis of a market leader’s alliance
portfolio can be utilized as a model in the industry fields needing innovation
In case of using this model, a firm can reduce the cost for network construction
and operation
Research implication
14. Research limitations and further study
Limitations
• Patent data can only reveal one aspect of firm
innovation
• The result of this research doesn’t clearly
show whether patents lead to a business
innovation
Further study
analyze diverse outcomes of business
innovation(such as the increased production
of new products or the increased sale of new
products etc.)
carry out a survey or interview targeting
experts in each company
• Joint patent is one of a result of R&D
collaboration
• These findings do not contain a character of
partners(unique properties about
knowledge and technology, the cultural
differences etc.)
cover the alliance portfolio size, the structural
and partner dimension of alliance portfolio as
well as other various factors to show that
these factors lead to a business innovation
15. Thank you
If you have any questions or comments about
my findings, please contact me at:
hjjeong@krict.re.kr