Strategic Management Journal, Vol. 12, 83-103 zy (1 991) z COMPETITION FOR COMPETENCE AND INTER- PARTNER LEARNING WITHIN INTERNATIONAL STRATEGIC ALLIANCES GARY HAMEL zyxwvu London Business School, London, U. K. zyxwvu c z T- Global competition highlights asymmetries in the skill endowments of firms. Collaboration may provide an opportunity for one partner to internalize the skills of the other, and thus improve its position both within and without the alliance. Detailed analysis of nine international alliances yielded a fine-grained understanding of the determinants of inter- partner learning. The study suggests that not all partners are equally adept at learning; that asymmetries in learning alter the relative bargaining power of partners; that stability and longevity may be inappropriate metrics of partnership success; that partners niay have competitive, as well as collaborative aims, vis-a-vis each other; and that process may be more important than structure in determining learning outcomes. zyxw THE RESEARCH QUESTION A skills-based view zyxwvutsrq of the firm It is possible to conceive of a firm as a portfolio of core competencies on one hand, and encompassing disciplines on the other, rather than as a portfolio of product-market entities (Prahalad and Hamel, 1990). As technology bundles, core competencies make a critical contribution to the unique functionality of a range of end-products. An example is Honda’s expertise in powertrains, which is applied to products as diverse as automobiles, motorcycles, generators, and lawn mowers. Encompassing disciplines include total quality control, just-in- time manufacturing systems, value engineering, flexible manufacturing systems, accelerated prod- uct development, and total customer service. Such disciplines allow a product to be delivered to customers at the best possible price/performance trade-off. Core competencies and value-creating disciplines are precisely the kinds of firm-specific skills for which there are only imperfect external markets, and hence form the zyxwvuts ruison d’etre for the multinational enterprise (Buckley and Casson, 1985; Caves, 1971; Teece, 1981). Conceiving of the firm as a portfolio of core competencies and disciplines suggests that inter- firm competition, as opposed to inter-product Competition, is essentially concerned with the acquisition of skills. In this view global competi- tiveness is largely a function of the firm’s pace, efficiency, and extent of knowledge accumulation. The traditional ‘competitive strategy’ paradigm (e.g. Porter, 1980), with its focus on product- market positioning, focuses on only the last few hundred yards of what may be a skill-building marathon. The notion of competitive advantage (Porter, 1985) which provides the means for computing product-based advantages at a given point in time (in terms of cost and differentiation), provides little insight into the process of knowl- edge acquisition and skill building. Core competencies and value-creating disci- plines are not distributed equally among firms. Expansion-minded competitors, exploiting such firm-specific advantages, bring the skill deficien- cies of incumbents into stark relief. The present 0143-209519 1 /050083-2 I $1 1.50 0 1991 by John Wiley & Sons, Ltd.