Interorganizational relationships are vital for innovation and competitive advantage. However, research has primarily focused on high-tech and biopharmaceutical sectors, leaving a gap in understanding their impact on traditional manufacturing industries, which is crucial for a nation's economic development. The current academic discourse lacks a comprehensive understanding of how traditional manufacturing firms strategically configure alliance portfolios to foster innovation over longer time horizons. To address this gap, this study investigates international alliance partnerships in the Japan-Taiwan context, emphasizing external resources and inter-firm linkages as competitive advantage sources. It examines resource management and alliance portfolio configuration within traditional industries, specifically Japanese-Taiwanese alliances in China's automotive and machine tool manufacturing sectors. Findings shed light on the intricate nature of alliance portfolio configuration in traditional manufacturing, involving careful partner selection and resource adjustment through exploitation and exploration. The research offers valuable insights into dynamic alliance development and factors influencing innovation. It presents three propositions and identifies trust, equity commitment, firm capabilities, proactiveness, alliance resource redundancy, and domain segmentation as driving factors. This study contributes to theoretical and empirical knowledge, examining research implications while acknowledging limitations. Future research directions should address these limitations and examine further avenues, deepening our understanding of the complexities involved in driving innovation through interorganizational relationships in industries that lay the foundations for economic growth.