3. Classifying Synergistic Growth Options Embedded in Strategic Alliances

Using the basic taxonomy of strategic partnerships suggested by Dussauge and Garrette (1999), we provide a real-options-based classification of growth option synergies enabled by alliances with indication of the latent real option type and discussion of typical real-world examples. Recurring real options that may arise depending on the form of alliance established with a competitor and are exercisable by the ally include: the option to switch to the alliance’s production in the case of a vertical complementary alliance; the option to abandon (or divest) the alliance’s operations in the case of a shared-supply alliance; the option to expand the scope of one’s own business outside the boundaries of the cooperative venture in the case of an horizontal complementary alliance; the option to learn reciprocally in the case of a quasi-concentration alliance.