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Innovation Through Co-Opetition

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Innovation Through Co-Opetition MASTER‘S THESIS Copenhagen Business School MSoc. Sc. in Organisational Innovation and Entrepreneurship INNOVATION THROUGH CO-OPETITION A qualitative study aiming to explore factors promoting the success of co-opetition in product and service innovation Authors Eszter Zsófia Hoffmann (116254) Vivien Melanie Boche (116290) Supervisor Professor, Dr. Karin Hoisl Hand-in Date: 15/05/2019 Character Count: 226.178 (100 standard pages) ABSTRACT The central topic of this master’s thesis is the simultaneous pursuit of competition and co-operation, coined into one term; “co-opetition”. This phenomenon has received increased attention by schol- ars and practitioners in the past two decades since it adapts to today’s fast-changing business envi- ronment and enables mutual benefits for rival companies. This paper addresses the lack of literature regarding the interplay between co-opetition and specific innovation types. A co-opetitive relation- ship can drive businesses towards new opportunities to achieve innovation outcomes that they can- not accomplish alone. The purpose of this thesis is to provide businesses and academics a better understanding of co-opetition, its challenges, and success causing determinants in a real business context related to innovation. Special attention is paid to the exploration of critical soft factors be- hind the successful outcome of co-opetition between rival firms innovating together, and a compar- ison of those factors between product- and service-oriented companies. Nine qualitative interviews with professionals from well-known companies were conducted to investigate their perception and experience in innovation through co-opetition. This data led to the identification of four themes: the process of innovation through co-opetition, the reasons for and challenges in co-opetition, and the well-working co-opetitive relationship. This study confirmed predicted critical success factors, Trust and Commitment, of well-working co-opetitive relationships. Furthermore, this thesis identi- fied additional critical success factors including both common, namely Alignment and Openness, and differing determinants between product innovation, particularly Understanding, and service innovation, including Time and Size Balance. Lastly, findings revealed the tendency of companies to participate in ecosystems that enhance the emergence and pursuit of co-opetition. Keywords: Co-opetition, co-operation, collaboration, competition, innovation, product innovation, service innovation, success factors TABLE OF CONTENT ABSTRACT TABLE OF CONTENT LIST OF FIGURES LIST OF TABLES 1. INTRODUCTION .................................................................................................................... 1 2. LITERATURE REVIEW ............................................................................................................. 4 2.1 COMPETITION .......................................................................................................................... 4 2.2 CO-OPERATION ........................................................................................................................ 5 Vertical and Horizontal Relationships .......................................................................................... 6 2.3 STRATEGIC PERSPECTIVES ........................................................................................................ 7 2.3.1 Resource-Based View ....................................................................................................... 7 2.3.2 Game Theory .................................................................................................................... 8 2.4 CO-OPETITION .......................................................................................................................... 9 2.4.1 Paradox in Co-opetition ................................................................................................. 11 2.4.2 Reasons for Co-opetition ................................................................................................ 12 2.4.3 Challenges in Co-opetition ............................................................................................. 15 2.4.4 Classifications of Co-opetition ........................................................................................ 16 2.4.4.1 Types of Co-opetition ............................................................................................. 17 2.4.4.2 Intensity of Co-opetition ........................................................................................ 18 2.4.4.3 Diversity of Co-opetition ........................................................................................ 19 2.5 SUCCESS FACTORS .................................................................................................................. 20 2.5.1 Critical Success Factors .................................................................................................. 21 2.5.2 Critical Success Factors in Co-opetition .......................................................................... 22 2.5.3 Shared Critical Success Factors in Co-opetition ............................................................. 27 2.5.3.1 Trust ....................................................................................................................... 28 2.5.3.2 Commitment .......................................................................................................... 28 2.6 INNOVATION .......................................................................................................................... 30 2.6.1 Development of Innovation ............................................................................................ 30 2.6.2 Innovation Types ............................................................................................................ 32 2.6.2.1 Extent of Change .................................................................................................... 33 2.6.2.2 Place of Innovation ................................................................................................ 36 2.6.2.3 Object of Innovation .............................................................................................. 36 2.6.3 Product Innovation ......................................................................................................... 38 2.6.4 Service Innovation .......................................................................................................... 39 2.6.5 Product versus Service Innovation ................................................................................. 40 2.6.6 Co-opetition for Innovation ............................................................................................ 41 2.6.6.1 Innovation Network ............................................................................................... 41 2.6.6.2 Open Innovation .................................................................................................... 43 3. METHODOLOGY .................................................................................................................. 45 3.1 PURPOSE OF THE RESEARCH ............................................................................................... 45 3.2 RESEARCH PHILOSOPHY ..................................................................................................... 46 3.3 RESEARCH APPROACH ........................................................................................................ 47 3.4 RESEARCH STRATEGY ............................................................................................................. 49 Selection of Participants ............................................................................................................. 50 3.5 DATA COLLECTION ................................................................................................................. 51 3.5.1 Primary Data .................................................................................................................. 51 3.5.2 Secondary Data .............................................................................................................. 53 3.6 DATA ANALYSIS ...................................................................................................................... 53 3.7 DATA QUALITY ........................................................................................................................ 55 3.7.1 Reliability ........................................................................................................................ 55 3.7.2 Validity ........................................................................................................................... 55 3.7.3 Generalisability .............................................................................................................. 56 4. ANALYSIS ............................................................................................................................ 57 4.1 PRESENTATION OF THE COMPANIES ...................................................................................... 58 4.1.1 Consumer Goods Industry .............................................................................................. 59 4.1.2 Electronic Manufacturing Industry ................................................................................ 60 4.1.3 Automotive Industry ......................................................................................................
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