Research Policy 36 (2007) 1496–1511 Available online at www.sciencedirect.com Strategic repositioning by means of alliance networks: The case of IBM Koen Dittrich a,* , Geert Duysters b,c , Ard-Pieter de Man d,e a RSM Erasmus University, Department of Management of Technology and Innovation, PO Box 1738, 3000 DR Rotterdam, The Netherlands b UNU-MERIT, Keizer Karelplein 19, 6211 TC Maastricht, The Netherlands c Eindhoven Centre for Innovation Studies (ECIS), PO Box 513, 5600 MB Eindhoven, The Netherlands d Free University Amsterdam, Faculty of Economics and Business, De Boelelaan 1105, 1081 HV Amsterdam, The Netherlands e Atos Consulting, Building C, Papendorpseweg 93, 3528 BJ Utrecht, The Netherlands Received 14 October 2004; received in revised form 19 June 2007; accepted 3 July 2007 Available online 13 August 2007 Abstract This paper aims to show that alliance networks can play an important role in facilitating large-scale strategic change projects. It focuses on the particular case of IBM, whose radical redirection from an exploitation strategy towards an exploration strategy was realized by major changes in its network strategy. We show that by involving new partners in the network and by loosening the ties with its existing partners, IBM managed to transform from a hardware manufacturing company to a global service provider and software company. The findings suggest that the traditional view of large firms as being slow to adapt may not be valid because alliance networks can be used to overcome inertia. © 2007 Elsevier B.V. All rights reserved. Keywords: Alliance networks; Strategic change; Exploration/exploitation; IBM 1. Introduction The strong upheaval in the number of newly estab- lished strategic technology alliances has drawn the attention of academics and practitioners alike. There is growing consensus in the academic and managerial literature that alliance networks do matter for the inno- vative performance of companies (see e.g. Ahuja, 2000; Hagedoorn, 1993; Nooteboom, 1999; Owen-Smith and Powell, 2004; Powell et al., 1996; Rowley et al., 2000). * Corresponding author. Tel.: +31 10 4082597; fax: +31 10 4089014. E-mail addresses: KDittrich@rsm.nl (K. Dittrich), Duysters@merit.unu.edu (G. Duysters), ard-pieter.deman@atosorigin.com (A.-P. de Man). However, the same publications seem not to clarify how such alliance networks can act as catalysts of large-scale strategic change projects (De Man and Duysters, 2005). Strategic change is generally seen as something inter- nal to the firm and not directly related to the alliance portfolio of the firm. This paper departs from the existing literature in the sense that it proposes that external relations in a com- pany’s alliance network can be instrumental in strategic change processes as well. The main contribution of the paper is that we describe the role of alliance networks in strategic change processes and support this view by studying one of the most impressive strategic reposi- tioning programmes in the history of business, that of IBM. In this paper, we analyze how deliberate changes in the network structure enabled IBM to reposition itself in 0048-7333/$ – see front matter © 2007 Elsevier B.V. All rights reserved. doi:10.1016/j.respol.2007.07.002