A partner selection approach for strategic alliance in the global aerospace and defense industry

Finding a mutually beneficial alliance partner is a critical success factor for various companies. This paper aims to propose an effective method based on grey theory and data envelopment analysis (DEA), which efficiently predicts future business and measures operational performance by using critical input and output variables. Decision-making units (DMUs) can find the most appropriate candidates. This research was implemented with public data from four consecutive financial years (2012-2015) of the world's 35 largest aerospace and defense companies. The study forms a total of 69 virtual alliances for target Airbus Group SE (DMU2) and 627 virtual alliances for all inefficient DMUs. The empirical results showed that the alliances between DMU2 +DMU1 and DMU27 + DMU6 are the two most feasible partnerships. DMU3, DMU6, and DMU13 are considered to be the best partners for inefficient DMUs. DMU6 was recommended 12 times (63%), DMU3 was recommended four times (21%), and DMU13 was recommended three times (16%). The study will be a key recommendation for strategic planners of the aerospace and defense industry as well as other manufacturing industries.