How to overcome the disruptor's dilemma: Exploring strategic alliance reconfiguration of new market entrants

Disruptive innovation studies show entrants face the disruptor's dilemma — an interplay with the incumbents they stand to disrupt. Previous research has characterised this interplay by relational and contextual tensions that may dissuade the entrants from disrupting. Yet, we know little about how entrants develop and grow disruptive business models despite such tensions. So, we studied two entrants that continued disruptive business model developments in the German fashion retail and insurance industries from 2014 to 2019. We found that these two entrants continuously reconfigured alliance portfolios, developing alliances with partners unaffected by the disruption who supported the entrants' value creation, delivery, and capture. These partners shielded the entrants from relational and contextual tensions. Our study contributes to the relational view in the disruptive innovation literature by showing that entrants reconfigure alliance portfolios unaffected by the disruption. It also demonstrates that entrants proactively and strategically combine social and timing defence mechanisms to overcome the disruptor's dilemma and continue disruptive business model development. Finally, our study contributes to the ex-ante view of disruptive innovation by showing how entrants can overcome the disruptors' dilemma by combining alliance portfolio reconfigurations and social and timing defence mechanisms to continue disrupting. This contribution holds vital managerial implications for disruptive entrants.