Competition and termination of the alliances between asymmetric partners: The case of Japanese department stores

To enrich the literature on alliance termination, we recognize that the dynamics of individual alliances are subject to the structural characteristics of the alliance portfolios in which they are embedded. We anchor our study in the context of large industry leaders partnering with multiple small partners, the latter of which can be viewed as competing for access to the formers’ resources. We expect that a small partner’s relative capability in relation to peer partners within a leader’s alliance portfolio is negatively related to the likelihood of alliance termination, since the leader acknowledges that partners with inferior capability do not deserve to be supported. Furthermore, this relationship would be moderated by alliance portfolio size, market overlap with peer partners, and with industry leaders. Using a unique dataset of 145 alliances between leading and small department stores in Japan in the period 1977-93, we found general support for the hypothesized relationships.