Strategic embeddedness of modularity in alliances: Innovation and performance implications

This paper examines modular product structures in alliances. Results from a survey of 225 alliances show that modular product structures within alliances affect alliance firms' competitive performance. Product innovation performance, assessed as both speed to market and radical innovations and contingent on the employed innovation strategy, partially mediates this effect. Modular product structures exert curvilinear effects on product innovation performance and linear effects on competitive performance. Although the interaction of modular product structures with an innovation strategy increases product innovation performance, this contingency also reduces the positive effect of the innovation strategy on competitive performance.