Christoph Lechner

Multipartner alliances have become a popular vehicle for coordinating firms' strategies in technologie-driven industries. They Play an important role in promoting industry standards, yet very few firms have been able to sucessfully leverage their involvement in these complex organizations. Apparently, a firm's experience with bilateral alliances is insufficient for Managing the tradeoffs entailed by engagement in multilateral relationships. This chapter analyzes the benefits, costs and risks associated with multipartner alliances.

The case compares the growth strategies (from 1990 to 2007) of the two main British grocery businesses: Sainsbury and Tesco. It starts in 1990, when Sainsbury was the clear market leader way ahead of Tesco. Today, this situation has changed dramatically with Tesco not only having overtaken Sainsbury but having reached twice the market share of its competitor which even lost the second position to Asda (a Wal-Mart subsidiary). This case describes the growth strategies and the concrete growth initiatives undertaken by the two competitors in the time period covered. Tesco provides a good example of how to move from being a small to being a big company. 10-15 years ago, Tesco was pretty much a British grocery business. Today it is an international business providing telephony, financial services, legal services, books, music, and electrical goods. Tesco has many different shop formats including hypermarkets and Express stores and has a successful on-line business.

In 2008, the UK-based international food and general merchandising retailer Tesco reached a market share of about 30% in the UK, roughly the same as its rivals Sainsbury's and ASDA combined. Tesco has greatly diversified, extending its business lines from food into non-food, clothing, financial services, and telecommunications. It ranks sixth in the international retail market behind Wal-Mart (US), Carrefour (France), Home Depot (US), Metro (Germany), and Royal Ahold (Netherlands). Tesco was not always the dominant player it is today. In 1990, it was a mid-sized food chain far behind its rival, Sainsbury's. Starting in the 1990s, it pursued a broad set of growth initiatives, steadily increasing its market share and gaining importance. In 1995, Tesco surpassed Sainsbury's to become the UK's market leader. Today, Tesco is the clear market leader. How did that happen? Why was Tesco so successful in growing sales and profits, while Sainsbury's could not keep pace? Where did the competitive actions of these firms differ? Let us start with a close look at their origins.

In this chapter, we display the current disciplinary knowledge on strategic initiatives and outline future research areas. We begin with definitions of the concept, its various types and classifications, and describe several research streams focusing on them. Then, we propose an organizing framework for elaborating research on strategic initiatives and discuss in detail its single elements. We close by outlining future research opportunities.