Configuration of alliance portfolio for firm’s innovation in Eco-friendly car industry
-HYUNDAI and TOYOTA
Hyeonjoo Jeong, Youngju Ko
UST KIRCT CampusKOREA
Parallel Session 1.5: Accelerating Cluster Growth in Asian Countries
Background1
Method2
Result3
Discussion4
Research limitation & Further study5
Contents
Background
Bioplastic
Fusion of Bio & Chemical Technology
• Solution for cli-mate change is-sues
Eco-friendly auto-mobile material
The strategic al-liance 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 pro-
duction eco-friendly cars
4 Securing original technologies through strategic alliance TOYOTA took over PLA production fac-
tory from SHIMADZU through a strate-gic alliance
• Response the in-ternational envi-ronmental regu-lation
Alliance portfo-lio 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 di-mension of al-liance 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 dimen-sion 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
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
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 al-liance portfolio
No. of partners No. of alliances
The proportion of re-peated partners
Technology similarity Type of partners
HYUNDAI TOYOTA
50223
11155
No. of bioplastic patentsNo. of total patents No. of joint patents
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 ac-tive 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 al-liances
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
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
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)
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
Discussion
HYUNDAIAlliance portfolio size was expanded by the increment of partners and alliances
Large alliance configuration size with a number of part-ners 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 co-operates with other partner types
• An increment in the coopera-tion 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
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
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 in-novation
Further study
analyze diverse outcomes of business innova-tion(such as the increased production of new products or the increased sale of new prod-ucts etc.)
carry out a survey or interview targeting experts in each company
• Joint patent is one of a result of R&D collab-oration
• These findings do not contain a character of partners(unique properties about knowl-edge 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
Thank youIf you have any questions or comments about
my findings, please contact me at: