New Challenges in Alliance Portfolio Management - Innovation and Marketing in the Pharmaceutical Industry - page 160

Admittedly, the discussions of higher-order routines and capabilities are rather
abstract; moreover, they are inherently intangible and notoriously diffi cult to mea-
sure: these are serious hindrances for empirical testing (Lewin et al. 2011 ). How can
the recent insights from the absorptive capacity literature be used to derive action-
able managerial recommendations? Future research on alliance portfolios and fi rm
capabilities should highlight what concrete fi rm actions or strategies help generate
the routines and capabilities that facilitate external knowledge sourcing. As men-
tioned earlier, routines result from accumulated experiences. What are the fi rm
actions that produce these experiences? If we can identify fi rm actions that help
build the routines for valuing extramural knowledge, we can derive concrete recom-
mendations that help managers benefi t from an alliance portfolio.
The most logical starting point, in my view, is to examine the strategies that fi rms
employ to generate knowledge internally . These strategies generate experiences
that help value extramural knowledge. In order to identify what strategies may be
most effective to this end, we need to understand the challenges of dealing with a
diverse alliance portfolio. For example, Ahuja and Lampert ( 2001 ) identify three
organizational pathologies in the realm of breakthrough innovations: “a tendency to
favor the familiar over the unfamiliar; a tendency to prefer the mature over the
nascent; and a tendency to search for solutions that are near to existing solutions
rather than search for completely de novo solutions” (p. 522). The diversity of alli-
ance portfolios and the associated need for a broad outlook on the technological
fi eld form a fourth challenge. Firms that organize their internal knowledge creation
strategy to meet these four challenges may build the necessary routines to benefi t
from a diverse alliance portfolio (see Wuyts and Dutta 2012 for a further elaboration
of these ideas and fi rst evidence from the biopharmaceutical industry).

5.4.3 Challenge 3: The Changing Nature of Collaboration

A third challenge for alliance portfolio research and practice is particular to the
pharmaceutical industry: technological and institutional developments will likely
change the nature of collaboration. The evolution of biotechnology, the emergence
of nanotechnology, the notion of personalized medicine, and industrial and institu-
tional changes are among the factors that change the nature of collaboration.

Evolution of biotechnology . When biotechnology emerged as a commercially viable
path to developing new drugs in the mid 1980s, pharmaceutical fi rms sought to keep
track of the emerging technological fi eld by allying with biotechnology fi rms. Even
though still today there is a functional divide between biotechnology fi rms and
pharmaceutical fi rms in the industry, the distinction is not as clear-cut as several
pharmaceutical fi rms developed strong biotechnology capabilities by the end of the
1990s (Vassolo et al. 2004 ). This change in the functional divide of the industry has
implications for the nature of collaboration.
The development of a science-based industry naturally follows a pattern similar
to the development of science itself. The latter is discussed in the philosophy of