The Impact of Horizontal Strategic Alliances On The U.S. Steel Industry


Industry Competitiveness
Strategic Alliances

How to Cite

The Impact of Horizontal Strategic Alliances On The U.S. Steel Industry. (2004). Journal of Business Strategies, 21(2), 149-178.


Despite the popularity of strategic alliances among firms, the public is ambivalent
about the industry impact of horizontal alliances. It is not apparent that the
benefits of alliances to the firm also accrue to the industry. This paper examined
the U.S. steel industry data from 1977 to 1997 to determine the potential impacts
of capability horizontal alliances on industry competitive structure. The results
are indicative of positive impacts on industry competitiveness (profitability and
productivity) and competitive structure (price competition and declining industry
concentration). A capability hypothesis is offered that posit that horizontal alliances
that enhance partner firms' capabilities may diffuse critical capabilities
or 'best practices' within an industry thereby raising the average level of competitiveness
in the industry and inducing competitive pressures that can result
in price competition and erode industry concentration.


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