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abstract  This paper addresses an important gap in the literature intersection between network theory and networked innovation by developing a theoretical framework on how to leverage learning alliances across extra- and intra-corporate levels to support both exploration and exploitation of innovation to secure its creation and its implementation. A detailed case of the Volvo C70 development is analysed with focus on how the full innovation from exploration to exploitation of innovation seem to rely on fundamentally different types and structures of networks. Our detailed description and analysis of how a ‘transformation network’ was established and operated across different organizational levels to secure not only transfer, but also transformation and integration of knowledge into commercialized innovation makes an important contribution to extant theory on inter-organizational knowledge transfer and networking.