LAUSR

The success of a strategic alliance depends upon factors like complementarity and compatibility among partner firms. A systematic assessment of the target firms by the alliance-initiating firm in terms of these two partner traits can lead to greater success of the prospective strategic alliance. Firms always have specific motivations to form strategic alliance and therefore the expected complementarity and compatibility with the prospective alliance partner will also differ on various occasions. In the partner selection process for forming strategic alliance, the alliance-initiating firm needs to do a systematic trade-off among these two partner traits. Various innovative capabilities of the target firms must be used to measure these two partner traits in case of forming strategic alliance for innovation. Since the partner selection problem is a discrete alternative multi-criteria decision problem, this paper demonstrates application of the analytic hierarchy process (AHP) to solve partner selection problem during the formation of a strategic alliance for innovation.