Capabilities theory suggests that an alliance will be preferred over going it alone when an exchange partner possesses valuable, rare, and costly-to-imitate resources and capabilities.

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Capabilities theory emphasizes that forming an alliance is preferable to going solo if the partner has resources and capabilities that are valuable, rare, and difficult for competitors to duplicate. These attributes improve the organization's bargaining power, innovation, and market share.

Capabilities Theory Suggests That an Alliance Will Be Preferred Over