Strategic alliances have become an increasingly essential part of business strategies, acquiring new capabilities that help firms adapt to the fast changes and competitive business environment. Nonetheless, many firms have overlooked the importance of capabilities for managing alliances, resulting in more than 50% of alliances failing due to a lack of alliance capabilities (Anand & Khanna, 2000,2020; Duysters et al., 1999; Huang et al., 2018; Linwei et al., 2017; Madhok et al., 2015; Russo & Cecerani, 2017). Without a deeper understanding of the micro-processes and challenges involved, the new organisational configurations spiralling out of the new digital technologies underpinning innovative and evolving competitive manufacturing processes risk undermining the success of many alliances. Indeed, few studies have examined the specific actions and interactions within organisational contexts to deepen our understanding of alliance formation and integration from a micro-level perspective (Kohtamäki et al., 2018). Based on an interpretive approach and informed by a social constructionism ontology, I have conducted a single firm, qualitative study with a grounded theoretical approach built on Gioia’s method (Gioia, 2011). The study was conducted in one of the world’s largest transportation manufacturing companies, utilising semi-structured interviews with people who were involved in this firm’s debut experience of forming and integrating alliances into their organisational context. The main contribution of this study is the development of a new theoretical framework on the micro-processes, dynamics and capabilities of early-stage alliance formation. This framework is essential in developing our understanding of how organisations should look at formation and integration processes as systemic whole greater than the sum of its separate processes and capabilities. The study also empirically reveals how emergent alliance formations and integrations and their associated capabilities transform a firm's required resource base, consequently strengthening the firm's dynamic capability. The framework sheds light on the dynamics between three essential capabilities: sensing, seizing and integration. These three aggregated alliance capabilities each contain several alliance capabilities and, if managed and developed appropriately, can help companies and their leaders to better understand their roles in the successful management of alliances. Finally, I propose that future studies can further investigate alliance formation and integration processes through the lens of the provided framework and focus more specifically on the single firm organisational context.