Understanding the Effects of Plural Marketing Structures on Alliance Performance

Abstract

A plural alliance structure involving multiple downstream partners has become increasingly popular, yet investigations of marketing alliances continue to address mainly dyadic structures. The authors present learning and dependence balancing as key mechanisms to understand the relative performance differences between plural and dyadic structures, as well as the determinants of effective collaboration in a plural structure. Two complementary studies test the performance of plural and dyadic structures in a wide range of high-tech industries. The analysis of both plural and dyadic structure alliances in an event study shows that plural structures outperform dyadic structures for the upstream firm when marketing alliances extend to product-related tasks, the upstream firm has more alliance experience, or the industry is growing fast; however, dyadic structures perform better when the upstream market is more competitive. A second study, focusing only on plural structure alliances, shows that horizontal relationship factors (i.e., market overlap and prior relationship between downstream partners) interact with the upstream firm's greater alliance experience and reputation to lead to better returns for the upstream firm.