Open Innovation Strategies: A new pivot for OEM and Start ...1330390/FULLTEXT01.pdf · MVP: Minimum Viable Product NDA: Non-Disclosure Agreement NPD: New Product Development OEM:

Department of Business Administration Master's Program in Business Development and Internationalisation

2nd Year Master's Thesis in Business Administration, Spring 2019 Supervisor: Zsuzsanna Vincze

Open Innovation Strategies: A new pivot for OEM and

Start-up Coopetition

A Study of the German Automotive Industry

Ismaila A. Jallow, Julia Sénécal

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“It is said that it is not the strongest of the species that survives, but the most adaptable”

(Prats et al., 2017, p. 9)

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Abstract

“[A]s much as any other product, the car has shaped not only the global economy but how billions of people live”1, while the digital area is now shaping the car.

Coopetition, a strategy presenting firms with the opportunity to collaborate and compete at the same time, is becoming a prevalent phenomenon among large OEMs and start-ups in the automotive industry. Respectively, considering that coopetition, in the context of open innovation and new technologies, has been identified as a successful strategy, this thesis will therefore analyse the relationship between OEMs and external start-ups in the context of coopetition and corporate open innovation strategies. Several types of corporate incubators, accelerators and corporate innovation labs emerged within the last years, however an integration of all three of these has not yet been widely explored. Accordingly, while these open innovation streams are used by large corporations to get access to the start-up ecosystem and increase their innovation capabilities, the relationship between OEMs and external start-ups will further lead to CIIAs (a combined approach of corporate incubators, corporate innovation labs and corporate accelerators), demonstrated in the context of coopetition. This exploratory study thereby contributes to the relationship between external start-ups and OEMs through a CIIA approach, answering the two following research questions;

• What are the main drivers of the OEM and external start-up relationship? • How do OEMs and external start-ups coopete in the context of corporate open

innovation strategies?

To duly answer these research questions, we chose a qualitative research method combined with an interpretivist and inductive approach as well as empirical findings generated from 6 semi-structured interviews. We further contributed to the illustration of the key aspects of CIIAs as well as the motives, management and implications behind the relationships between OEMs and external start-ups by a conceptual framework. Our analysis hence shows the significance of the access to complementary resources, the co-creation and co-development of value as well as the systematic implementation of a proof of concept in the light of these coopetitive relationships between CIIAs and external start-ups. However, considering that this research has been based on the German automotive industry only, it will require further research in other contexts, sectors or countries. To conclude, this thesis contributes to the management literature of coopetition, corporate innovation and entrepreneurship. We proposed a final framework to highlight the key motives, the management and the implications behind the coopetitive relationships between OEMs and external start-ups through the CIIA platform. This will expectedly help managers and entrepreneurs develop efficient management techniques as well as further recognize and understand the influential dynamics present in these relationships. Key words: Automotive Industry. Corporate Innovation. Corporate Entrepreneurship. Strategic Entrepreneurship. Cooperation. Coopetition. Corporate Incubators. Corporate Accelerators. Corporate Innovation Labs. Start-ups. Open Innovation Strategies.

1 Bertoncello & Wee, 2015, cited in Ferràs-Hernández et al., 2017, p. 856

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Acknowledgements We would like to thank the Umeå School of Business, Economics and Statistics for providing us with such a wonderful setting to thrive in but also our supervisor Zsuzsanna Vincze for supporting us throughout the whole process, especially by sharing valuable feedback with us. To all our respondents, we greatly appreciate the time and effort you dedicated in participating in this study in spite of your busy schedules. Your contributions were greatly valuable to our research. Lastly, we would like to extend appreciations to our families and classmates for the unconditional support and encouragement during these times as well as the Swedish Institute for the support brought to Ismaila’s education. Umeå University, 24th of May 2019 Ismailla A. Jallow & Julia Sénécal

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Abbreviations AI: Artificial Intelligence BM: Business Model CA: Corporate Accelerator CEO: Chief Executive Officer CI: Corporate Incubator CIL: Corporate Innovation Lab CIIAs: Corporate Incubators, Innovation Labs and Accelerators COO: Chief Operating Officer CSR: Corporate Social Responsibility CV: Corporate Venturing CVC: Corporate Venture Capital EO: Entrepreneurial Orientation HR: Human Resources IIA: Incubator, Innovation Lab and Accelerator IL: Innovation Lab IoT: Internet of Things IP: Intellectual Property IT: Information Technology M&A: Mergers & Acquisitions MVP: Minimum Viable Product NDA: Non-Disclosure Agreement NPD: New Product Development OEM: Original Equipment Manufacturer R&D: Research & Development SE: Strategic Entrepreneurship SMEs: Small and Medium-Sized Enterprises USP: Unique Selling Proposition VC: Venture Capitalist

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Table of Contents 1 INTRODUCTION ............................................................................................................................. 1

1.1 PROBLEM BACKGROUND ............................................................................................................ 1 1.2 THEORETICAL BACKGROUND ..................................................................................................... 2 1.3 RESEARCH GAPS ......................................................................................................................... 3 1.4 RESEARCH QUESTIONS ............................................................................................................... 4 1.5 RESEARCH PURPOSES ................................................................................................................. 4 1.6 DELIMITATIONS AND LIMITATIONS ............................................................................................ 5

2 THEORETICAL FRAMEWORK ................................................................................................... 6 2.1 CORPORATE INNOVATION ........................................................................................................... 6

2.1.1 A Definition of Corporate Innovation ................................................................................... 6 2.1.2 Closed Innovation ................................................................................................................. 7 2.1.3 Open Innovation .................................................................................................................... 8

2.2 CORPORATE ENTREPRENEURSHIP ............................................................................................. 10 2.2.1 A Definition of Corporate Entrepreneurship ...................................................................... 10 2.2.2 Strategic Entrepreneurship ................................................................................................. 12 2.2.3 Corporate Venturing ........................................................................................................... 16 2.2.4 New Directions for Corporate Innovation & Corporate Entrepreneurship ....................... 17

2.3 OEM AND EXTERNAL START-UP COLLABORATION ................................................................. 18 2.3.1 OEMs and Start-ups ............................................................................................................ 18 2.3.2 A Cooperative Relationship ................................................................................................ 19

2.4 CIIAS: A COMBINED APPROACH OF START-UP AND OEM INTERACTION ................................ 22 2.4.1 Corporate Incubators .......................................................................................................... 22 2.4.2 Corporate Innovation Labs ................................................................................................. 24 2.4.3 Corporate Accelerators ....................................................................................................... 25 2.4.4 CIIAs ................................................................................................................................... 27 2.4.5 Motives and Challenges of the CIIA and Start-up Relationship ......................................... 28

2.5 A COOPETING RELATIONSHIP ................................................................................................... 31 2.5.1 Definition of Coopetition .................................................................................................... 31 2.5.2 Coopetition between OEMs & External Start-ups .............................................................. 32 2.5.3 CIIA and External Start-up Coopetition: A Conceptual Framework ................................. 33

3 METHODOLOGY .......................................................................................................................... 36 3.1 RESEARCH METHODOLOGY ...................................................................................................... 36

3.1.1 Choice of Subject ................................................................................................................ 36 3.1.2 Literature Selection and Source Critics .............................................................................. 37 3.1.3 Research Philosophy ........................................................................................................... 37 3.1.4 Research Approach ............................................................................................................. 39 3.1.5 Research Design ................................................................................................................. 40

3.2 PRACTICAL METHODOLOGY ..................................................................................................... 41 3.2.1 Data Collection ................................................................................................................... 42 3.2.2 Participants Selection ......................................................................................................... 43 3.2.3 Interview Guide ................................................................................................................... 44 3.2.4 The Interview Process ......................................................................................................... 45 3.2.5 Quality Criteria ................................................................................................................... 46 3.2.6 Ethical Considerations ........................................................................................................ 48 3.2.7 Data Analysis ...................................................................................................................... 50

4 EMPIRICAL FINDINGS ............................................................................................................... 53 4.1 THE CIIAS BACKGROUND AND AREA OF COMPETENCE ........................................................... 53

4.1.1 CIIA 1 .................................................................................................................................. 54 4.1.2 CIIA 2 .................................................................................................................................. 54 4.1.3 CIIA 3 .................................................................................................................................. 54 4.1.4 Start-up 1 ............................................................................................................................. 54 4.1.5 Start-up 2 ............................................................................................................................. 55 4.1.6 Start-up 3 ............................................................................................................................. 55

4.2 CIIAS’ PROOF OF EXISTENCE ................................................................................................... 55 4.3 THE CIIA AND EXTERNAL START-UP RELATIONSHIP ............................................................... 56

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4.3.1 CIIA’s Organizational Context ........................................................................................... 56 4.3.2 Partner Selection ................................................................................................................. 58 4.3.3 Collaboration Between CIIAs and External Start-ups ........................................................ 60

4.4 THE KEY MOTIVES DRIVING THE START-UP AND CIIA RELATIONSHIP .................................... 63 4.4.1 Access .................................................................................................................................. 63 4.4.2 Organizational Learning ..................................................................................................... 64 4.4.3 Competitive Advantages ...................................................................................................... 65 4.4.4 Growth ................................................................................................................................ 66 4.4.5 Co-Creation and Co-Development ..................................................................................... 67 4.4.6 Network ............................................................................................................................... 67 4.4.7 Proof of Concept ................................................................................................................. 68 4.4.8 Funding and Ownership ...................................................................................................... 69 4.4.9 Long-Term Collaboration ................................................................................................... 70 4.4.10 Reputation and Recognition ........................................................................................... 70

4.5 COOPETITION BETWEEN CIIAS AND EXTERNAL START-UPS .................................................... 71 4.5.1 Challenges & Risks ............................................................................................................. 71 4.5.2 The Balance Between the Sharing and Protection of Resources ........................................ 74 4.5.3 Trust .................................................................................................................................... 77 4.5.4 Opportunism ........................................................................................................................ 78 4.5.5 Possible Competitional Tensions Between CIIAs and External Start-ups .......................... 79

5 ANALYSIS AND DISCUSSION .................................................................................................... 80 5.1 THE CIIA AND EXTERNAL START-UP RELATIONSHIP ............................................................... 80 5.2 KEY MOTIVES OF THE COOPETITIVE RELATIONSHIP BETWEEN CIIAS AND EXTERNAL START-UPS 82

5.2.1 Access .................................................................................................................................. 82 5.2.2 Growth ................................................................................................................................ 83 5.2.3 Proof of Concept ................................................................................................................. 83 5.2.4 Co-Creation and Co-Development ..................................................................................... 83 5.2.5 Organizational Learning ..................................................................................................... 84 5.2.6 Competitive Advantages ...................................................................................................... 84 5.2.7 Enable Start-ups Proof of Concept ..................................................................................... 85

5.3 THE COOPETITION BETWEEN CIIAS AND EXTERNAL START-UPS ............................................. 85 5.3.1 Common Stakes ................................................................................................................... 85 5.3.2 Power Relation .................................................................................................................... 86 5.3.3 Management of the Coopetition .......................................................................................... 88 5.3.4 Implications of the Coopetition ........................................................................................... 89

5.4 PROPOSED FRAMEWORK ........................................................................................................... 90 6 CONCLUSION ................................................................................................................................ 92

6.1 RESEARCH FINDINGS ................................................................................................................ 92 6.2 THEORETICAL CONTRIBUTIONS ................................................................................................ 93 6.3 MANAGERIAL IMPLICATIONS .................................................................................................... 93 6.4 SOCIETAL IMPLICATIONS .......................................................................................................... 94 6.5 LIMITATIONS AND FUTURE RESEARCH ..................................................................................... 94

7 REFERENCES ................................................................................................................................ 96 8 APPENDICES ................................................................................................................................ 118

8.1 APPENDIX 1. ........................................................................................................................ 118 8.2 APPENDIX 2. ........................................................................................................................ 121 8.3 APPENDIX 3. ........................................................................................................................ 124

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List of Figures Figure 1: Hidden Knowledge and Problem Complexity (Felin & Zender, 2013, p. 919) . 9 Figure 2: Four Models of Corporate Entrepreneurship (Wolcott & Lippitz, 2007, p. 77) ......................................................................................................................................... 11 Figure 3: Model of Strategic Entrepreneurship (Ireland et al., 2003, p. 967) ................. 13 Figure 4: Input-Process-Output Model of SE (Hitt et al., 2011, p. 58) ........................... 15 Figure 5: The Nine CV Mode Profiles (Gutmann, 2019, p. 130) ................................... 17 Figure 6: Benefits, Challenges and Risks of the Corporate-Start-up Collaboration (adapted from World Economic Forum, 2018, p. 7-10) .................................................. 22 Figure 7: Design Elements and Constructs of Corporate Accelerators (Pauwels et al., 2016, p. 17) ..................................................................................................................... 26 Figure 8: The Three Stages of CIIAs .............................................................................. 28 Figure 9: CIIAs, External Start-ups and their Coopetitive Landscape ............................ 35 Figure 10: Illustration of Themes and Subthemes .......................................................... 52 Figure 11: The Coopetitive Dynamics Between OEMs and External Start-ups in the Context of Corporate Open Innovation Strategies .......................................................... 90

List of Tables Table 1: Relationships Between Firms (Bengtsson & Kock, 1999, p. 180) ..................... 2 Table 2: Classification of Start-up Incubators in the Literature (Latouche, 2019, p. 21)23 Table 3: Forms of Corporate-Start-up Innovation Strategies (Vázquez Lucerga, 2018, p. 20) ................................................................................................................................... 27 Table 4: CIIAs Motives ................................................................................................... 28 Table 5: Start-up Motives ................................................................................................ 29 Table 6: An Explanatory Typology of Coopetition (Akpinar & Vincze, 2016, p. 56) ... 34 Table 7: Phases of the Thematic Analysis (Braun & Clarke, 2006, p. 87) ..................... 50 Table 8: Overview of the Interviewed CIIAs and Start-ups ............................................ 53

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1 Introduction In this first chapter, we are going to introduce our research subject and purpose as well as our study aims. First, we will introduce some insights about strategic entrepreneurship and open innovation, and then relate it to the cooperation and coopetition that may exist between CIIAs and external start-ups. Second, we will elaborate on the theoretical background and portray some motivations concerning the relevance of the subject in the field of business administration. Third, we will identify the existence of research gaps and further explain how we intend to contribute to these theories. Lastly, we will state our research questions, the purpose of the research and the delimitations of the study. 1.1 Problem Background In the current fast-paced business environment, large corporations are constantly challenged to find ways for quick innovation to efficiently thrive in this new context. Yet, start-ups are good at questioning the status quo and bring in new disruptive innovations that challenge the existing ones (Hitt et al., 2011, p. 70). Some examples are Uber, Spotify and Airbnb, that revolutionized the way big firms used to compete in their respective industries. These start-ups therefore come up with novel innovations that open up new markets, thus gaining competitive advantages. Accordingly, as these young firms may have the expertise and the innovation capabilities that large corporations may lack, the collaboration between start-ups and large enterprises transforms into a valuable sourcing of innovation (Hitt et al., 2011, p. 67). Additionally, cooperation and coopetition have been used as strategic means in the purpose of co-innovation for a high amount of years now. Considering the fast-changing business environment, the most successful companies will therefore be the ones that engage in cooperative ties with their suppliers, customers and strategic partners (Huff Eckert, 2017). Huff Eckert (2017) further posits that one particular area that proves to be especially fruitful is the start-up ecosystem. According to the PwC’s 20th CEO survey, executives respectively predict that in the coming years, 28% of CEOs expect to collaborate with start-ups or entrepreneurs. With the above in mind, corporates have started to broaden the barriers of corporate innovation and search for knowledge and resources outside the organization in the form of open innovation (Chesbrough, 2006; Dahlander & Gann, 2010; Elmquist et al., 2009). As a result, firms increasingly engage in collaborations with other businesses (Hagedoorn, 2002, p. 477) to gain competitive advantages, resulting in an overall increase of the value of such collaborations (Dittrich & Duysters, 2007, p. 520). Moreover, as entire industries become more digitalized in the light of the industry 4.0., defined by the increased use of the IoT in the logistics and manufacturing processes (Bartodziej, 2016, p. 2), companies need to gear up to be able to cope with the massive amount of innovation opportunities available. Digitalisation in the automotive industry thereby means; autonomous driving, battery or biofuel powered cars, connected vehicles and the creation of new business models (Athanasopoulou et al., 2016). The incorporation of cloud based and wireless technologies in the new car designs will therefore be key for the attainment of sustainable and long-term goals. Hence, despite the known potential of digital technologies in the automotive sector, a recent and overall review directed at the best combinations of innovative technologies and effective business models, proved that only Tesla and Daimler where able to represent the automotive companies in this specific context (MIT Technology Review, 2017). Correspondingly, the need for OEMs in the automotive industry to implement and incorporate novel technologies becomes indispensable. In addition, Bengtsson and Johansson (2010, p. 455) argue that firms need

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to increasingly gain access to knowledge and capabilities in their related industries in order to be able to recognize, assimilate and integrate this knowledge into new products or services. The disruptive and innovative ideas and capabilities can thereby be linked to the wish to further shape the future of the automotive industry. Accordingly, a surge of corporate incubators and accelerators as well as corporate innovation labs, seeking to partner up with external start-ups, can be detected. An international statistic shows that between 2010 and 2016, the cooperation between corporate incubators and corporate accelerators among automotive companies rose from 2% to 44% (IESE Business School, 2018). Appropriately, this makes the investigation of the coopetitive relationship that could exist between corporate IIAs and external start-ups timely and extremely relevant. Finally, and in light of corporate open innovation strategies, new technologies and the need for successful coopetitive approaches should be considered (Chesbrough & Bogers, 2014; Ritala & Sainio, 2014). In this regard, a high density of business relationships and collaborative interactions among suppliers, customers, and even competitors lead to higher uncertainties (Gnyawali & Park, 2009). Previous work has so far been beneficial in improving the general understanding of coopetition, but it leaves unanswered the questions concerning the reasons why SMEs and large corporations engage in coopetition, how they organize these coopetitive partnerships as well as what benefits and risks prevail in these unequally-sized partnerships (Hora et al., 2017, p. 412). Correspondingly, in the automotive industry, open innovation strategies aiming at the acceleration of corporate innovation, without however provoking an excessive change in the current structures and organizational culture, are preferred (Hjalmarsson et al., 2019, p. 6001). Thus, a variety of agile and lean-oriented innovation formats, such as jams, hackathons, lean start-up camps, corporate incubators and accelerators, have evolved (Kuratko & Audretsch, 2013). However, the cooperation between OEMs and external start-ups in the context of open innovation strategies has, at this point in time, received less attention in the academic research and we therefore wish to explore this by bringing in new insights to this field. 1.2 Theoretical Background In accordance with Michael Porter’s (1980, p. 31) five competitive forces, for a firm to gain sustainable competitive advantages strong bargaining power, the development of entry barriers and the fight against substitution threats play a major role. While the resource-based view argues that good performance is based on the organizations’ possession of rare, valuable and hardly reproducible resources and capabilities (Barney, 1991, p. 117), the relational view relates collaborations to jointly gained competitive advantages (Dyer & Singh, 1998, p. 675). The later view further enlightens that firms in isolation, irrespective of their capabilities, cannot enjoy the advantage gained through the collaboration with other firms. Thus, firms’ source of competitive advantage by cooperation as well as the different forms of collaborative relationships between firms are not new concepts (Table 1). Nevertheless, it is the relationship between start-ups and established enterprises that needs to be further studied. Table 1: Relationships Between Firms (Bengtsson & Kock, 1999, p. 180)

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These relationships between organizations, as depicted on the above table, can therefore take four different forms: coexistence, competition, cooperation and coopetition. Firstly, coexistence emerges when the organizations have the need for external resources and their relative position in the industry seem to be weak. Secondly, competition exists in presence of a weak need for external resources combined with a strong relative position in the industry. Thirdly, cooperation, on the other hand, means that there is a strong need for external resources and a weak relative position in the industry. Lastly, coopetition occurs when the need for external resources and the relative position in the industry are both strong. Bengtsson and Kock (1999, p. 178) thereby define coopetition as a “dyadic and paradoxical relationship emerging when two firms are cooperating in some activities, while competing with each other in the remaining activities’’. The cooperation strategy, diversely, can be generally defined as a relation between two or more parties with compatible or additional interests or aims, where the relationship is foreseen to be of reciprocal advantage (Wortelboer-van Donselaar & Kolkman, 2010, p. 271). Furthermore, strategic entrepreneurship is a theory that combines both strategic management and entrepreneurship and involves the methods of exploration and exploitation (Ireland et al., 2003, p. 964). Thus, start-ups are good opportunity explorers while large firms are effective advantage exploiters. However, for a company to bring disruptive innovations into the market it has to employ a combination of the opportunity-explorer and advantage-exploiter behaviour (Ireland et al., 2003, p. 982). Additionally, start-ups are often related to new technologies, novel innovations, the identification of new opportunities and the according expertise (Hogenhuis et al., 2016; Ireland et al., 2003, p. 966; Latouche, 2019, p. 40), clearly needed by OEMs, while the OEMs have a strong position in the industry and valuable strategic partnerships (Ketchen et al., p. 372). The strength of large corporations thereby lies in the capability to develop and sustain competitive advantages over time (Ireland et al., 2003, p. 966). Finally, the need for external knowledge and innovative solutions for the OEM to gain competitive advantages, motivates the existence of a possible coopetitive relationship between both of these market players. In this study we thereby aim to analyse the relationship between external start-ups and large corporations in the automotive industry and more specifically understand their opportunity and advantage seeking behaviours in the context of CIIAs. 1.3 Research Gaps As previously pointed out in the problem background, the automotive industry is becoming more digitalised with the advent of autonomous and highly technological cars. In addition, recent decisions from car manufacturers have shown that nearly all large automotive corporations are now engaging in strategic entrepreneurship or open innovation strategies with external start-ups through CIIAs. Some examples are; the Honda Xcelerator, the Volkswagen Ideation:Hub, the BMW Start-up Garage, Volvo’s CampX, the Toyota Innovation Hub, the Business Lab of PSA, the Jaguar Land Rover Innovation Labs as well as the Renault Open Innovation Labs. However, the heterogeneity of these business incubation models is still clearly overlooked in the literature (Bruneel et al., 2012; Hackett & Dilts, 2004) and despite the surge of these collaboration possibilities between external start-ups and corporate IIAs, not much attention has been paid to study their relational mechanisms yet (Roig-Tierno et al., 2018, p. 380). The emergence of corporate IIAs thereby illustrates that the diverse streams of open innovation partnerships between OEMs and external start-ups are still to be further analysed.

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When it comes to coopetition, on the other hand, Bengtsson and Johansson (2014) studied the management of small firm coopetition in the tech-industry, while others conducted empirical studies exploring the relationship between competing SMEs (e.g. Morris et al., 2007a; Levy et al., 2003; Bengtsson & Johansson, 2014). However, at this point in time, SME and especially start-up coopetition is not sufficiently explored (Roig-Tierno et al., 2018, p. 380). While the coopetition between large corporations and start-ups is being further investigated (e.g. Hora et al., 2017), in the broader context of the entrepreneurial activity it has not been clearly defined (Bouncken et al., 2015; Gast et al., 2015). Additionally, Drain (2015, p.12) states that coopetition literature does not yet include the study of incubators and accelerators whereas Fecher et al. (2018) add that ILs should be further investigated in general. Finally, furthering the understanding of the relationship that exists between corporate IIAs and their partnering external start-ups in the contexts of the German automotive industry and coopetition, is a contribution that our research aims to bring forth. With this in mind, to further enlighten the cooperation and coopetition literature on this specific topic is another one of our main goals. 1.4 Research Questions In connection to our study background and research gaps, our research aims to answer the following questions clearly figuring in the overall context of the German automotive industry:

• What are the main drivers of the OEM and external start-up relationship? • How do OEMs and external start-ups coopete in the context of corporate open

innovation strategies?

Appropriately, our first research question aims at exploring the competitive advantages gained through the OEM and external start-up relationship, simultaneously identifying the most relevant motives of this relationship. To further understand the motives behind these relationships we will thus conduct a qualitative study of this relationship between OEMs and external start-ups through the approach of so-called CIIAs. Subsequently, the second research question’s purpose is to gain more insights on how these two actors coopete, especially in the context of a combined corporate innovation strategy. Therefore, in order to be able to answer the second research question and better understand the aspects of coopetition in this relationship, we will first need to showcase the different intentions and dynamics of the collaboration between OEMs and external start-ups as well as its transformation into a coopetitive relationship. Correspondingly, the second research question is not only intended to showcase the key motives as well as the management and implications of the relationship between CIIAs and external start-ups but also answers the according sub question of When do OEMs and external start-ups coopete in the context of corporate open innovation strategies? This therefore includes the expectation that our and theoretical framework together with our empirical findings will enlighten us on the changes in the relationship between CIIAs and external start-ups from a ‘normal’ collaboration to a coopetitive relationship.

1.5 Research Purposes The primary purpose of our research is to identify the major motives and dynamics that actuate the relationship between corporate IIAs and external start-ups. And secondly, to explore the relationship between OEMs and external start-ups in the German automotive industry, both in the context of coopetition and CIIAs. Additionally, an elaborated research will be needed to further explore the effectiveness (Becker & Gassmann, 2006a,

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p. 482) of the different corporate incubation, acceleration and innovation methods, especially in light of their combined approach. Our research will therefore help to further understand the role of corporate IIAs, their internal mechanisms as well as the management and implications of their relationship with external start-ups. We will portray the theories around corporate innovation and corporate entrepreneurship to analyse the relationship between OEMs and their partnering start-ups in the context of corporate innovation strategies. Accordingly, the strategic entrepreneurship theory will help us better understand how firms use cooperation and coopetition to seek opportunities and exploit them in their surroundings, with the aim to gain novel innovations and thus competitive advantages. To appropriately respond to our previously described research questions, our qualitative research design will be supplemented by semi-structured interviews with three CIIA managers and three start-ups founders. Lastly, the creation of the final framework through the combination of our theoretical framework and empirical findings, figuring in Chapter 5 of our master thesis, intends to display the coopetition dynamics present in the relationship between CIIA, and simultaneously OEMS, and external start-ups. Correspondingly, and especially in light of our second research question we hope to contribute to the coopetition literature and expect to showcase some significant managerial implications through our empirical findings, and thereby help managers and entrepreneurs, in the automotive industry, better understand how these specific relationships work and illustrate what motives, benefits and risks might be present in this ecosystem. 1.6 Delimitations and Limitations When it comes to the possible delimitations that we could face, especially in light of our theoretical point of departure, it has to be said that the detailed and correct positioning of the corporate incubator, innovation lab and accelerator (CIIA) as well as the right angle of connectedness between CIIAs, external start-ups and coopetition will play a main role in our theoretical framework. Considering the choice of the German automotive industry in combination with digitalization, new technologies, open innovation strategies and the collaboration with external start-ups, howbeit, an increased focus has been noticed in the literature (e.g. Hjalmarsson et al., 2019; Macheleidt, 2016; Wilhelm & Dolfsma, 2018), thereby clearly supporting the single-country context of our research. Moreover, as this master thesis is concerned with a relatively new concept, it includes the possible difficulties to find the appropriate academic as well as empirical data, which challenges the efficient measure of the dynamics of such relationships. In addition, the concept of CIIAs not yet been studied carefully, it will be introduced through the proposed approach by Vázquez Lucerga (2018, p. 97-103). Accordingly, this will reasonably affect the resulting implications, the management as well as the key motives of the coopetition between external start-up and large OEMs. In the end, we hope that the theory will be considerately backed up by the practical insights from our empirical findings, with the main goal to be generalizable.

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2 Theoretical Framework Our theoretical framework we will now assess the existing literature on corporate innovation and corporate entrepreneurship and display the different corporate open innovation strategies that exist between OEMs and external start-ups, in an attempt to combine them in light of coopetition in the context of the German automotive industry. First, we will provide theories on corporate innovation. This will be followed by insights on strategic entrepreneurship and corporate venturing, introduced through the process of corporate entrepreneurship. We shall then discuss the collaborative relationships that exist between large OEMs and external start-ups in light of open innovation strategies. Lastly, we will propose a conceptual framework to further enlighten how a coopetitive relationship could help attain corporate entrepreneurship, foster innovation and build as well as sustain competitive advantages for both the OEMs and external start-ups. 2.1 Corporate Innovation 2.1.1 A Definition of Corporate Innovation The first definition of innovation was coined by Schumpeter in the late 1920s stating that; “innovation is reflected in novel outputs: a new good or a new quality of a good; a new method of production; a new market; a new source of supply; or a new organizational structure” (Schumpeter, 1934). However, there are various authors that contributed to the definition of innovation (Lansisalmi et al., 2006; Camison-Zornoza et al., 2004; Hobday, 2005; Klein & Knight, 2005; Kline & Rosenberg, 1986). Following an extensive literature review, Crossan and Apaydin (2009, p. 1155) provide a suitable definition, characterising innovation as the

“production or adoption, assimilation, and exploitation of a value-added novelty in economic and social spheres; [the] renewal and enlargement of products, services, and

markets; [and the] development of new methods of production; and establishment of new management systems. It is both a process and an outcome”.

Likewise, according to Christensen (1997), disruptive and sustaining innovation are two types of innovation strategies that firms engage in. These approaches, also called radical and incremental innovations by Schuh et al. (2017, p. 1) are both as equally important and in need to be successfully implemented. In the light of strategic entrepreneurship, corporations therefore should not devote more resources to one at the expense of the other. Instead balancing the two based on current market positions should be considered (Ireland & Webb, 2007, p. 58). Accordingly, disruptive innovations, usually created by new players in the market, involve the creation of novel innovation, as for example in regard to technologies or product features, creating new markets and business models as well as replacement opportunities for existing products or service. Thus, large firms are better in sustaining innovation and use their current capabilities and resources to regularly ameliorate their products or services, and therefore hold existent competitive advantages (Ireland et al., 2003, p. 982; Schuh et al., 2017, p. 1). In the end, for corporates to create disruptive innovations and introduce them to the market, they have to employ both opportunity-seeking and advantage-seeking behaviours (Ireland et al., 2003, p. 982). In today’s dynamic environments, innovation and creativity are regarded as critical resources for firms to have an edge over competitors (Dess & Picken, 2000, p. 18; Magadley & Birdi, 2009, p. 315), and similarly an opportunity for firm growth (Mone et al., 1998, p. 126). Therefore, the need for continuous innovation is crucial for firm's success. When it comes to the automotive industry, increasing costs and pressures to be

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innovative are prevalent due to changing customers' demands, technology fusions and environmental consciousness (Ili et al., 2010, p. 246). According to Ireland et al. (2009, p. 21) corporate innovation represents ‘‘[…] a vision directed, organization-wide reliance on entrepreneurial behavior that purposefully and continuously rejuvenates the organization and shapes the scope of its operations through the recognition and exploitation of entrepreneurial opportunity”. These challenges seem to force companies to find new ways to be innovative and acquire knowledge from external sources, where open innovation is regarded as more adequate compared to the traditional closed innovation model (Ili et al., 2010, p. 246; Lazzarotti et al., 2013, p. 53). 2.1.2 Closed Innovation Traditionally, companies’ innovations are done internally by research and development (R&D) departments and taken to market by the firms' own channels. Chesbrough (2003, p. 1) described it as a vertical “[…] integration model where internal R&D departments develop technology in‐house”. Research projects are carried out by science and technology fields, among which the projects with the most potential are selected for further development and launched in the market (Chesbrough et al., 2006, p. 2). The whole process, from the idea generation over the idea development and the innovation of products or services to commercialisation is thereby done internally and only financed by the firm itself (Chesbrough, 2003). Although, many firms have begun to use open innovation approaches, some projects still require closed innovation methods (Boscherini et al., 2012, p. 229) Correspondingly, some innovations require some level of “closed-ness” because its outcome are critical to the firms' competitive advantage (Christensen et al., 2005, p. 1535). Hence, in instances where there is a high risk of knowledge spill-overs or there are no partners that hold competences required for the exploration and exploitation of the technology due to its complexity to be pursued through open innovation, firms will do better by using closed innovation strategies (Almirall & Casadesus-Masanell, 2010, p. 28). Almirall and Casadesus-Masanell (2010) further argue that as the complexity is high, closed innovation offers a better development opportunity (Almirall & Casadesus-Masanell, 2010, p. 33). In addition, Felin & Zender (2013, p. 918) discussed two distinct forms of internal governance; authority-based hierarchy and consensus-based hierarchy, each consisting of distinctive governance attributes. In the authority-based hierarchy, the transmission of knowledge is cheaper as communication is more centralized. Therefore, hierarchy through its access to authority, low-powered incentives and property rights can both minimize the need for transmission of knowledge (Felin & Zender, 2013, p. 919). Further, Arrow (1974, cited in Felin & Zender, 2013, p. 919) posits that “the centralization of decision making […] serves to economize on the transmission and handling of knowledge”. Hence, minimizing the authorities need to persuade the employees to act together in knowledge sharing and problem solving (Felin & Zender, 2013, p. 919). Felin and Zender (2013) further enlighten us on the fact that the focal actor identifies the knowledge for solving certain problem type and further assign it to individuals and teams for action. More specifically, the authority-based hierarchy is ideal for solving moderately complex problems due to a decreased need for knowledge transfer. The incentives for innovation or inventions are low, whereby the employees are usually compensated with guaranteed salaries. In addition, the property rights and all innovations are ceded in the focal firm (Felin & Zender, 2013, p. 918).

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As described by Felin and Zender (2013, p. 919), the consensus-based hierarchies centralized on; “[…] rich horizontal communication channels that support knowledge exchange among

peers, are ideally suited to solving the most com-plex, non-decomposable problems, where widespread knowledge sharing is critical to the formation of theory essential to

exploration.” For this type of hierarchy, moderately complex problem can be restructured to sub-problems to ease the solving of the problem by individuals or groups, thus requiring a less central coordination. Additionally, these hierarchy’s, due to the above-named advantages, can be seen as the most suitable and efficient in solving more complex and differently structured problems (Macher & Boerner, 2012, p. 1032). Similarly to the other approach, the incentives are low and the intellectual property rights remains with the focal firm (Felin & Zender, 2013, p. 919). However, hierarchy is also characterized by the burden it places on managers for centrally identifying problems and together with low incentives and property rights been ceded in focal firms, rich communication channel loose value, which can compromise motivation (Felin & Zender, 2013, p. 918). However, organizational boundaries exist even if some may argue that the knowledge economy and the associated linkages will make them superfluous (Hadfield, 2011). The need for corporations to integrate both open and close innovation is therefore interpreted by Enkel et al. (2009, p. 312); “Today’s business reality is not based on pure open innovation but on companies that invest simultaneously in closed as well as open innovation activities. The future lies in companies or institutions which use every available tool to create successful products and services faster than their competitor and at the same time foster the building of

core competencies and protect their intellectual property.” In the end, Felin and Zender (2013, p. 915) further argue that the integration of open and close innovation governance is based on different situations, affecting the openness of the organizational boarders depending on the nature of the innovation problem. 2.1.3 Open Innovation Open innovation, on the other hand, has received considerable attention among researchers (Chesbrough, 2006; von Hippel, 2005; von Hippeland & von Krogh, 2003). Accordingly, open innovation is defined by Chesbrough et al. (2006, p. 1) as a method that enhances company internal innovation and profits from an increased use of external innovation through intended in- and outflows of knowledge. Chesbrough et al. further state that open innovation can be conceptually separated in two dimensions; the first, inbound or outside-in open innovation, which is ‘‘the practice of leveraging the discoveries of others’’ (Chesbrough et al., 2006, p. 2). This dimension involves building relationships with external stakeholders with the aim of accessing their knowledge and technology for improving the firm’s innovation. Whereas the second; outbound or inside-out open innovation, suggests that ‘‘rather than relying entirely on internal paths to market, companies can look for external organizations with business models that are better suited to commercialize a given technology’’ (Chesbrough, 2002, cited in Iakovleva, 2013, p. 18). Chesbrough et al. (2006, p. 2), also explain that open innovation, in comparison to closed innovation, can use either an internal or external technology

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source, which means that technology is acquired and transferred back to the market through different channels. Respectively, Felin and Zender (2013, p. 919) suggest four different approaches to open innovation and their suitability to different innovation problems. The four types of open innovation are: markets and contracts; partnerships, alliances and venture capital; contests, tournaments and innovation platforms and; users and user communities (Figure 1). Markets and contracts are more suited to solving problems that are less complex and require less hidden knowledge. Externally owned technology, knowledge and solution come in the form of exchanged property rights and licensing (Felin & Zender, 2013, p. 920). Licensing can therefore be a critical and important source of input for innovation (Arora & Fosfuri, 2003, p. 277). Besides, the knowledge transfer can be defined as a complete solution, as there is less exchange of communication and knowledge (Felin & Zender, 2013, p. 920). Felin and Zender (2013, p. 920) additionally assert that due to high incentives, the engaged actors are motivated to participate in the solution search.

Figure 1: Hidden Knowledge and Problem Complexity (Felin & Zender, 2013, p. 919)

Beyond, partnerships, alliances and CVC involve more openness and a collaboration that supports more knowledge transfer among collaborators. It thence encourages knowledge transfer and communication among partners (Felin & Zender, 2013, p. 920). Partnerships and alliances are stronger and can be considered as multi-face relationships that provide better problem solving and access to external knowledge (Kogut, 2000, p. 412). Contracts and property rights, contrarily, are more open-ended, and focus more on the efforts by partners than the actual outcomes (Reuer & Arino, 2007). While the incentives are more structured, to motivate collaboration between partners and simultaneously increase the knowledge exchange, property rights are more open-ended and negotiated between partners (Felin & Zender, 2013, p. 920). When it comes to contests, tournaments, and innovation platforms, firms seek solutions to problems through connecting problem-seekers and problem-solvers together (Felin & Zender, 2013, p. 921). The contest happens through a third-party platform that facilitates communication and coordinates the matchmaking of challenging problems to creative solution providers (Boudreau & Lakhani, 2013, p. 60). Incentives can take rather unstructured forms and come in prizes or rewards. This helps to motivate participants for

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their time effort. Rewards in such contest may therefore bring an increase in reputation, better chances for employment and the possibility of setting up an own venture. The property rights are usually ceded to the focal firm and the solution providers get prizes and benefits of selling the solution to the focal firm. “Contests and tournaments are ideally suited to solving decom-posable problems—clearly defined, well-structured and simple (i.e. non-complex) problems or sub-problems” (Felin & Zender, 2013, p. 921). Users and user communities voluntarily engage users to contribute to the valuable knowledge of the focal firms in regard to innovation or product improvement (Felin & Zender, 2013, p. 922). Appropriately, users voluntarily participate in the problem solving, property rights are ceded by focal firm and users usually benefit from using innovation generated by their contribution. The communication channel is relatively strong and when users or the user community usefully innovate, then the solution might be adopted by the firm and benefits will be shared. However, the communication channels between enterprises and the innovation community are rather complex as they seek for problem solving and innovation (Felin & Zender, 2013, p. 922). The user community and its diverse knowledge promotes incentives and property rights, encourages knowledge sharing and is most suited for solving complex problems with high level of hidden knowledge (Felin & Zender, 2013, p. 921). Hence, the user community lacks in control by the focal firm and selects problems individually, which induces that the focal firm acts more passively in managing innovation. In conclusion, open innovation proves to be more adequate for achieving innovation in the automotive industry than closed innovation (Ili et al., 2010, p. 246). Relating this to Peter F. Drucker (cited in Ili et al., 2010, p. 254), who affirms that; “The greatest danger in times of turbulence is not the turbulence: it is to act with yesterday’s logic”. Accordingly, to lead the organizational culture and the mindset towards innovation is the biggest challenge (Ili et al., 2010, p. 246). Thence, SME’s employ open innovation primarily as a means of reaching out to customers and to minimize the challenges of competition (Vrande et al., 2009, p. 423). In a similar note, corporations that step outside their borders to seek for knowledge and ideas particularly in uncertain environment, yield more innovation outcomes (West & Bogers, 2017, p. 47). At last, Lazzarotti and Manzini (2013, p. 53) found out that in context of open innovation in automotive industry, corporations seek to enlarge their competence base, explore new ideas and reduce costs in regard to innovation activities. Accordingly, one approach to explore and exploit new ideas is through corporate entrepreneurship (Ireland & Webb, 2007; Wolcott & Lippitz, 2007), which will now be further discussed. 2.2 Corporate Entrepreneurship 2.2.1 A Definition of Corporate Entrepreneurship Corporate entrepreneurship is defined as “the process by which teams within an established company conceive, foster, launch and manage new business that is distinct from the parent company but, leverage the parents’s assets, market position, capabilities or other resources” (Wolcott & Lippitz, 2007, p. 75). Wolcott and Lippitz (2007, p. 75) further indicate that this could involve external partners and capabilities but engage the company resources. Wolcott and Lippitz (2007, p. 77) propose four models (Figure 2) in which companies build businesses within their organization. The four models are developed based on two dimensions (who owns the new business created and are their funds or resources allocated

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to the venture). Based on these dimensions they identified the four following models: the opportunist, the enabler, the advocate and the producer. Under the opportunist model, there is no designated ownership or resource allocation but, as employees comes with innovative idea, it is often presented to management for approval. Once approval is given the opportunity is exploited by using the organization resources. This model works well in organizations that have a trustful and experimentation culture embedded in their organizational structure. In the absence of executive support such opportunities often spill-out through organizational cracks (Wolcott & Lippitz, 2007, p. 77).

Figure 2: Four Models of Corporate Entrepreneurship (Wolcott & Lippitz, 2007, p. 77)

The Enabler model explains that resources are dedicated and teams within the organization can pursue opportunities so far as they are within the organization strategic framework. In this model, clear criteria for opportunity selection, guideline for funding, decision making transparency and senior management support is provided. They use Google as an example of companies that use the enabler model. At Google, employees are allowed to spend 20% of their time to explore for innovative ideas and opportunities. Potential ideas are further exploited with funding provided and help from other teams within the firm. The entrepreneurial culture, dynamic market and financial slacks make google difficult to replicate. The Boeing Co. and Whirlpool Corp. are also example of firms that use the enabler model. Resource allocation alone is not the driver for entrepreneurial engagement but, personal development and executive support are critical (Wolcott & Lippitz, 2007, p. 77). Corbett and Hmieleski (2007, p. 115) argue that for employees to act entrepreneurially it is beyond providing resources and expert scripts but, employees should be allowed to step outside the box of the “traditional corporate role schemas and cultivate new entrepreneurial schemas”. They further assert that top executive should “be careful not to reinforce the development of event schemas (i.e., encourage or mandate that employees build the knowledge structures to create new ventures) without recognizing the need to simultaneously develop, encourage, and change the corresponding role schemas necessary to carry out the events” (Corbett & Hmieleski, 2007, p. 115). The advocate model, as they put it, advocate organizations act as evangelists and innovation experts, facilitating corporate entrepreneurship in conjunction with business units. The main organization provide a strong overall support to business units and the

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units provide the primary funding for opportunity exploration. Top leaders in these models spend most time advocating for new business creation and provide all the support needed in opportunity exploration. Finally, the producer model, similar to the enabler and advocate model for promoting entrepreneurs within but, this model further encourages cross-unit collaboration, building disruptive businesses and encourage executives to look beyond its unit boundaries for opportunities. Since this model is open for opportunities outside the strategic framework, such opportunities are passed through a business accelerator that will bring the offering to market. This model has the advantage of its openness for both internal and external ideas. Thus, exploration for new ideas is extended beyond the scope of internal business units to come with innovative ideas. Ideas, both from the inside or outside the organization are giving limited time. They explain that the accelerator aims to produce profits within few years to avoid what they called pie-in-the-sky research. This model however comes with its challenges, it may require significant investment over many years, the integration of successful projects into business units can be challenging. project team can be perceived as threats to business unit employees thus, building trust and credibility is critical for producer model success. Communication within business units and corporate management is critical successful promotion of corporate entrepreneurships (Wolcott & Lippitz, 2007, p. 78). 2.2.2 Strategic Entrepreneurship Strategic entrepreneurship, a function of corporate entrepreneurship (Phan et al., 2009; Morris et al., 2011; Corbett et al., 2013) is a theory developed by Hitt and Ireland in the early 21st century, which has attracted a lot of attention by scholars on how firms can explore and exploit opportunities in their surroundings (Hitt et al., 2011, p. 57). Resulting from the combination of two distinct research areas, accordingly strategic management and entrepreneurship (McGrath &MacMillan, 2000), Meyer and Heppard (2000) further argue that these two are inseparable. As the two terms depicts, it is a combination of strategy and entrepreneurship. Venkataraman and Sarasvathy (2001) even use a metaphor of “Romeo and Juliet” to relate to these terms. They suggest that strategic management research without integrating an entrepreneurial perspective is like a balcony without Romeo, whereas an entrepreneurial research without the integration of a strategic perspective should be seen as Romeo without a balcony (Venkataraman & Sarasvathy, 2001). Hence, strategic entrepreneurship is defined as “the integration of entrepreneurial (i.e., opportunity seeking behaviour) and strategic (i.e., advantage seeking) perspectives in developing and taking actions designed to create wealth” (Hitt et al., 2001, p. 481). As put by Hitt et al. (2001, p. 479);

“The age of progress is over. It was born in the Renaissance, achieved its exuberant adolescence during the Enlightenment, reached a robust maturity in the industrial age,

and died with the dawn of the twenty-first century”. The changes created by new technologies and globalization lead to competitive landscapes and uncertainties (Ireland & Hitt, 1999, p. 437). These changes could create significant changes in how businesses operate and even become opportunities. However, until now they mostly represent uncertainties (Hitt et al., 2001, p. 479). Therefore, firms

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should focus on identifying and exploiting these opportunities (Shane & Venkataraman, 2000, p. 218). Historically, small companies and start-ups are found to be relatively skilled in the opportunity recognition but lack the capabilities to effectively develop a sustaining competitive advantage in exploiting these opportunities (Ireland et al., 2003, p. 966). Ireland et al. (2003, p. 966) further elaborate that larger organizations demonstrated more skills in developing and sustaining competitive advantage. However, they show less competences in recognizing entrepreneurial opportunities. All firms, small or large must therefore engage in both opportunity-seeking and advantage-seeking behaviour (Ireland et al., 2003). Ireland and Webb (2007, p. 49) argue that firms should employ strategic entrepreneurship to exploit their current competitive advantages while exploring opportunities for the future. Therefore, the process of SE implementation has received a lot of attention. Ireland et al. (2003) put forth the model of strategic entrepreneurship, widely recognized by researchers among other processes of SE (Mazzei, 2018, p. 663). Their model presents key dimensions as the entrepreneurial mindset, entrepreneurial culture and entrepreneurial leadership, the strategic management of resources, the application of creativity and the development of innovation. Alternatively, Kyrgidou and Hughes (2010) interpret SE as a linear process that aims at developing competitive advantage. This could be achieved by employing entrepreneurial action and managing resources effectively (entrepreneurial behaviour). The whole process can be seen below (Figure 3).

Figure 3: Model of Strategic Entrepreneurship (Ireland et al., 2003, p. 967)

Strategic entrepreneurship, therefore, involves the integration of exploration and exploitation of business opportunities. Firms can undertake effective SE practices by separating exploration and exploitation activities and supporting each with distinct operational, structural and cultural mechanisms (Ireland & Webb, 2007, p. 52). However, for firms to reach an effective strategic entrepreneurship, they need to balance their action of exploration and exploitation (Ireland & Webb, 2007, p. 58).

Exploration occurs as firms seek to acquire new knowledge to add onto to their stock of knowledge. Ireland and Webb (2007, p. 53) see a knowledge breadth, when a firm seeks knowledge outside to add onto its existing knowledge. They further explain knowledge depth as when a firm seeks to increase its knowledge both internally and externally. In an effort for firms to acquire knowledge outside of their own boundaries, different strategies are employed. Mergers and acquisitions although controversial, are a path that firms use to acquire external knowledge (Ireland & Webb 2007, p. 53). Thus, due to fast changes and the complexity of the environment, strategic alliances and CVC programs are more popular strategy employed by firms for exploration.

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Exploitation on the other hand, involves firms taking the advantage of the opportunities created by exploration. Ireland and Webb (2007, p. 55) state that exploitation rests on knowledge of proven innovation. Firms that are able to meet market opportunities early can thereby use the first mover advantage and gain competitive advantage. Exploration is a method that is most efficient in times of uncertainties, while exploitation works best in times of stable and calm periods. Depending on the current condition the enterprise should therefore try to balance its action more towards one than the other. For firms to achieve effective SE they need to employ and balance both exploration and exploitation simultaneously (Ireland & Webb, 2007, p. 58). Furthermore, the model of strategic entrepreneurship (Figure 3), could be seen as combination of both exploration (e.g. entrepreneurial mindset, entrepreneurial culture and leadership) and exploitation (e.g. strategic managing of resources), leading to creativity and innovation. Ireland et al. (2003, p. 968) define the entrepreneurial mindset as “a growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation, and renewal”. Additionally, creating an entrepreneurial culture in an organization is an important aspect of attaining SE. Ireland et al., (2003, p. 970) described it as an environment in which new ideas and creativity is expected, risk taking, failures are tolerated, and the continuous innovation of products and services is championed. An entrepreneurial culture is promoted when leaders employ entrepreneurial mindsets. For firms to create an entrepreneurial culture and employ entrepreneurial mindsets, it has to be supported by its leadership. Thus, entrepreneurial leadership seeks to influence others to manage resources strategically with the goal to use both opportunity and advantage seeking behaviour simultaneously (Ireland et al., 2003, p. 971). Firms that create the culture of an entrepreneurial mindset and support it through leadership set the ground for exploration capabilities. The opportunities explored could thus be exploited by managing resources strategically, which helps in the effective exploitation of these opportunities. Amit et al. (2002) further elaborate on the fact that possessing resources alone is unlikely to predict firms’ competitive advantage. Accordingly, resources possession by firms produces a sustained competitive advantage only when they are managed strategically (Gove et al., 2003). In addition, Ireland et al. (2003, p. 973) argue that resources are strategically managed only when they are leveraged to simultaneously seek opportunity and advantage-seeking behaviour. Moreover, there are three types of resources to consider when engaging with SE: the financial, human and social capital (Ireland et al., 2003, p. 973). The financial capital represents the different monetary resources needed for the firm to implement its strategies. Firms with required slacks would thus be able to finance the activities for opportunity exploration and exploitation. Therefore, for new ventures to be able to attract funding they must be able to convince financial sources that they possess good human capital and social capital. Financial capital can be easily imitated by competitors. However, standing alone would not guarantee a sustained competitive advantage. Human capital mostly involves the knowledge and capabilities of the organization’s employees. This form of capital is intangible, therefore making it hard for competitors to imitate. Most of the firm’s knowledge resides in the firm’s human capital in the forms of articulable or explicit knowledge, being easily transferrable (Dess & Picken, 1999, p. 483). While tacit knowledge, which is embedded in routines and social context cannot be transferred as easily (Hitt et al., 2001, p.13). Knowledge is acquired overtime from both internal and external sources. Therefore, knowledge residing within and beyond the boundaries of the firm can also contribute to the development of innovation (Cohen &

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Levinthal, 1990, p. 128). Thus, human capital could be the most valuable resource for new ventures and large corporations that seeks to act entrepreneurially as well as gain and sustain competitive advantages (Ireland et al., 2003, p. 976). Finally, social capital is the relationship that bonds the firms’ internal and external social capital to promote collaboration and combined efforts. Trust is a key component in these relationships (Hitt et al., 2003) and promotes the successful transfer of knowledge between collaborators (Ireland et al., 2003, p. 976). It not only helps to build norms of reciprocity but parties in these relationships will also be more willing to share resources as they expect an exchange (Ireland et al., 2003, p. 976). Through reciprocity firms can then gain new knowledge from collaborators, possible to use for innovations. Considering the above-named capital resources, it is clear that firms need strategies to manage them effectively. Correspondingly, managing resources strategically involves, the use of financial capital to acquire human and social capital (Ireland et al., 2003, p. 978). When firms create a culture of entrepreneurial mindset supported with entrepreneurial leadership and combined with the strategic management of resources, this would result in a creativity and innovation fostering atmosphere (Ireland et al., 2003, p. 980). Ireland et al. (2003) further develop the theory of the creative destruction coined by Schumpeter’s in the early 20th century by arguing that it helps in significant firm growth and take market leaders by surprise. It involves the process in which organization’s act and react toward market dynamics. Schumpeter’s concept of a creative destruction thereby highlights the importance of creativity and innovation in a dynamic environment. Furthermore, the dimensions of strategic entrepreneurship discussed above seem complex and challenging for a firm to attain. Kyrgidou and Hughes (2010) challenged the strategic entrepreneurship model by emphasizing on the lack of robustness of SE. Thus, Hitt et al. (2011, p. 58) responded to the criticism through the input-process-output model of SE by including environmental factors, better resource orchestration and benefits SE could provide to societies, organizations and individuals.

Figure 4: Input-Process-Output Model of SE (Hitt et al., 2011, p. 58)

In dynamic environment firms use relationships to acquire needed resources and bundle them to exploit opportunities (Hitt et al., 2011, p. 61). They use cooperative strategies to

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build capabilities needed for competitive advantages (Hitt et al., 2011, p. 61). Ketchen et al. (2007, p.371) argue that collaboration between small and large firms to co-innovate by sharing ideas, knowledge and opportunities supports SE. New ventures are creative and big firms are more effective in exploiting current products to maintain competitive advantage. Therefore, the partnership between small and large firms can be productive due to their complementary resources of knowledge, market opportunities, reputation and access to internationalization. Firms lacking the resources needed to attain innovations internally, can use their external network of partners to locate needed resources to develop innovation (Hitt et al., 2011, p. 67). Hence, producing new innovations requires questioning the status-quo (Sood & Tellis, 2005, p. 164). Resource orchestration deals with how the firm in possession could effectively manage the firm resources to create a benefit. In the resource orchestration process a risk of imitation from competition when exploiting opportunities of the firm exists. Therefore, firms usually use patent and copyright protection in protecting of imitation from others (Burgelman & Hitt, 2007, p. 350). Entrepreneurs however use other means like negotiated contracts, to protect their knowledge or intellectual property (Hitt et al., 2011, p. 66). They further argue that regardless of the means used, the protection of intellectual property and complementary resources is critical to the value that resource orchestration creates. Competitors efforts to imitate firms value creation is difficult to avoid. Thus, the use of current knowledge to exploit advantages while exploring opportunities for continuous innovation is the source for sustained competitive advantage (Hitt et al., 2011, p. 69). 2.2.3 Corporate Venturing Alongside strategic entrepreneurship, corporate venturing (CV) being another path of corporate entrepreneurship is therefore equally relevant to discuss (Phan et al., 2009; Morris et al., 2011; Corbett et al., 2013). While, as seen before, strategic entrepreneurship is mostly concerned with the strategic, organizational as well as business model regeneration and renewal (Covin & Miles, 1999; Morris et al., 2007b), CV, on the other hand, can be seen as the creation of new business through either a company internal innovation or an outside-in approach (Miles & Covin, 2002). Strategic entrepreneurship hence includes all other corporate entrepreneurship streams not concerned with the creation or take-in of new businesses (Ireland et al., 2003). With outside technologies, products or services as well as business models being made available to the internal organization (Markham et al., 2005), the main purpose of CV is to further expand and share resources as a response to new technologies and the growing challenge of cultural change (Dushnitsky, 2011; Vázquez Lucerga, 2018, p. 13). Accordingly, CV can be related to the use of venture capital methods (Campbell et al., 2003) and the development of the corporate strategy (Ireland et al., 2001), “by building new capabilities and businesses that enable renewal, foster strategic change and enhance a company’s profits and growth in domestic as well as international markets” (Zahra & Hayton, 2008, cited in Narayanan et al., 2009, p. 58). Furthermore, when focusing on the outside-in approach, including external strategic opportunities and outside-in innovation streams, the investment in external high-tech start-ups leads the way (Ibrahim, 2016, p. 1741; Weiblen & Chesbrough 2015, p. 67). Correspondingly, an expanding “[…] heterogeneity of CV modes can be observed such as corporate accelerators, corporate incubators […] and [other] strategic partnerships with start-ups” (Gutmann, 2019, p. 122). Gutmann (2019, p. 130) positions these different

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types of CV modes, with the intention for corporations to adapt their value creation, capture and delivery activities correspondingly, into nine categories structured by the prioritization of objectives as well as the direction of innovation flow (Figure 5).

Figure 5: The Nine CV Mode Profiles (Gutmann, 2019, p. 130)

While keeping in mind that “[e]xploratory learning is the process of knowledge acquisition through recognizing external knowledge and assimilating it” (Lane et al., 2006, cited in van der Steen et al., 2013, p. 283), the external explorer or the explorative model can therefore be connected to external strategic partnerships, most probably with external start-ups (Miles & Covin, 2002), to enhance entrepreneurial growth (Mian et al., 2016). A current example for the external explorer, in the German automotive industry, is the Mercedes-Benz Challenge or the BMW Start-up Garage, created to enhance corporate innovation and shape product development through the discovery of external opportunities and the incorporation of external innovation and digitalization (Juell-Skielse & Hjalmarsson, 2017, p. 2). To close the gap between the corporation and external start-ups, BMW is thereby using an approach named ‘venture client’ (BMW, 2019; Gimmy et al., 2017). Lastly, instead of the exchange of investment against equity, the BMW Start-up Garage purchases their technologies and provides the start-ups with guidance, customers as well as other growth insurances (BMW, 2019). This definitely opens up to new ways of corporate entrepreneurship possibilities. 2.2.4 New Directions for Corporate Innovation & Corporate Entrepreneurship The notion corporate foresight, introduced by Rohrbeck (2011, p.11) as “an ability that includes any structural or cultural element that enables the company to detect discontinuous change early, interpret the consequences for the company, and formulate effective responses to ensure the long-term survival and success of the company”, has gained awareness especially in regard to the recent emergences in the fields of corporate innovation, corporate entrepreneurship and more specifically large corporations and start-ups engagement (Macheleidt, 2016, p. 39; Ruff, 2015, p. 37). Corporate innovation as one of the major strategies in today’s connected, disruptive and extremely competitive world (Kuratko et al., 2015; Latouche, 2019; Porter, 1998), where industry fields are now transformed into ecosystems (Latouche, 2019, p. 26), has become similarly challenging in its implementation and internal integration (Kuratko et al., 2014a). Additionally, with

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today’s unpredictability regarding the creation of innovation opportunities together with the ease of creating strategic partnerships, corporations are increasingly focusing on opening up their innovation processes to ensure knowledge and expertise inflows (Matzler et al., 2018, p. 14-18). According to Nonaka and Takeuchi (1995) new expertise and the acquisition as well as the increase of company internal knowledge are strictly related to competences and innovation, and therefore also the company’s competitive and strategic advantages. The shift in corporate innovation strategies can therefore be linked to the increased role and importance of start-ups in this digital area (Latouche, 2019, p. 30; Macheleidt, 2016, p. 39). Especially, in the automotive industry, where complexity and inertia in the organization structures, cultures and technologic capabilities prevailed (Dodourova & Bevis, 2014), digitalization and emerging new technologies are taking over. Traditional cars are now remodelled into self-driving, battery-powered, big data machines (Mikusz et al., 2015; Swan, 2015), and a change of mindset closely linked to this new source of external innovation, called start-ups, is prevailing (Ili et al., 2010, p. 249). New Original Equipment Manufacturers (OEMs), as for example Tesla or Google, high-tech and big data start-ups but also venture capitalists and research labs are now part of the new ecosystem of the automotive industry (Ferràs-Hernández et al., 2017, p. 857). Yet, the right integration of these external innovation opportunities still represents an important challenge to this day (Wilhelm & Dolfsma, 2018, p. 232). To ensure the most gain out of corporate innovation activities, where entrepreneurial and innovative behaviour form the base (Kuratko et al., 2014b), it is therefore extremely important that all involved stakeholders are as free to be innovative and creative as possible (Kuratko et al., 2014b, p. 654). 2.3 OEM and External Start-up Collaboration 2.3.1 OEMs and Start-ups Being only a few major players within the automotive industry (Pavitt, 1984), the leading vehicle manufacturers, also called Original Equipment Manufacturers (OEMs), (Juell-Skielse & Hjalmarsson, 2017, p. 2), represent large corporations enhancing national economic growth through their profitability, salary disbursements and international strategies (Rubini et al., 2012). To maintain the sustainable success of these corporates, rightful management of the core competencies regarding the technical value creation but also non-technical aspects concerning the firms’ environment is needed (Ruff, 2015, p. 38). Moreover, recent developments, especially in the German automotive industry, show that these large corporations are slowly moving away from vertical knowledge stream structures (Köhler et al., 2013) and the creation of innovation solely through internal R&D departments (Pavitt, 1984) and are now focusing on enhancing corporate innovation with the help of external start-ups (Macheleidt, 2016, p. 36). In the context of becoming the major innovator, their competitive advantages lie in their technological resources and skills (Ferràs-Hernández et al., 2017, p. 857). However, the stability but also the rigidity of internal structures, the need for large amounts of investments and the scaling mechanisms in place make it harder for smaller player to get involved in this ecosystem but also shield the OEMs from their own innovation potentials (Ferràs-Hernández et al., 2017, p. 857; Juell-Skielse & Hjalmarsson, 2017, p. 3). Luger and Koo (2005, p. 19) characterize a start-up as “[…] a business entity which did not exist before […] and which is neither a subsidiary nor a branch of an existing firm”. Being an important player in todays’ business world (Weiblen & Chesbrough, 2015),

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start-ups can be identified as disruptive innovators, initiators of growth and creators of employment and value (Kollmann et al., 2016; Latouche, 2019; Reid et al., 2015; Weiblen & Chesbrough, 2015). While mostly active in specialized fields, concerned with new technologies or creative business models, they exhibit creativity and adaptability as well as agility and speed (Hogenhuis et al., 2016; Latouche, 2019, p. 40). Successful entrepreneurs are characterized by being elaborated risk identifiers and takers (Ibrahim, 2016, p. 1768), equally risk-taking can be closely related to innovativeness (Rauch et al., 2009). However, due to their newness and smallness (Hora et al., 2017, p. 411), start-ups are limited when it comes to resources, expertise, networks, and reputation (Freeman & Engel, 2007) uncertainty, insecurity and instability are therefore inevitable (Neff, 2012; Gill, 2014). Furthermore, and according to Ahl and Marlow (2012, p. 544): “Entrepreneurialism celebrated as the foundation of opportunistic individualism […] enables the realization of human potential for creativity and innovation when freed from the confines of organizational and institutional regulation”. Inside an organization, this would figure as entrepreneurial orientation (EO), defined as “the extent to which the top managers are inclined to take business-related risks (the risk-taking dimension), to favor change and innovation in order to obtain a competitive advantage for their firm (the innovation dimension), and to compete aggressively with other firms (the proactiveness dimension)” (Covin & Slevin, 1988, p. 218). Accordingly, while the following five dimensions; innovativeness, risk taking, proactiveness, autonomy and competitive aggressiveness, constitute the base for EO (Lumpkin & Dess, 1996), the main goals require sustaining vision and the purpose of the corporation as well as develop competitive advantages (Rauch et al., 2009; Freitas et al., 2012). Finally, considering that start-ups are innovation creators and simultaneously give large corporations the possibility to widely access new technologies and disruptive ideas, a collaboration in this context is especially attractive for both parties (Marion & Friar, 2012; Weiblen & Chesbrough, 2015). 2.3.2 A Cooperative Relationship According to Chen (2008, p. 299); “organizations typically operate in an environment of relational interconnectedness, and that an organization’s survival and performance depend on its linkages to other organizations”. Additionally, the process of the collaboration itself might therefore be more important than finding an agreement (Donnellon et al., 1986). Particularly, in the highly dynamic digital environment we live in today, creating a large number of uncertainties, interfirm collaboration as well as other strategic interrelations flourish (Gnyawali & Park, 2009). Accordingly, inter-organizational cooperation is illustrated by Farrell and Doutriaux (1996), as a contractual or informal understanding, with shared goals (Argyle, 1991, p. 4) and values (Beech & Huxham, 2003), targeted at implementing or co-performing specific functional tasks together, without any effects on the legal structures of the collaborating firms. Moreover, it can be seen as a strategy, businesses involve in, in case of individual inability due to resources or expertise scarcity, a need for fast actions or the wish for resource maximization, decrease of similarities and enhancement of good will (Puetz & Shinn, 2002, p. 182). Successful collaborations not only include a common identity and trust (Drain, 2015, p. 27) but also encourage transparency and open communication, the right power balance, regular follow-ups and joint planning (Puetz & Shinn, 2002, p. 184), all with a positive impact for the business environment, the stakeholders and the businesses’ futures (Austin & Seitanidi, 2012).

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When it comes to corporate innovation, however, large corporations seem to be unable and still unexperienced to correctly implement innovative growth strategies (Chang et al., 2012; Kuratko et al., 2014a; Rohrbeck, 2011, p. 34). Even high performers in the market (Birkinshaw & Hill, 2005), have to cope with time-intensive processes (Rohrbeck, 2011, p. 34), organizational inertia (Bullinger et al., 2009), focusing on their current capabilities more than exploring the market for new radial innovation possibilities (Chang et al., 2012). Especially in the automotive industry, where complexity and difficulties arise due to the increase in range in regard to the implementation of new technologies (Laursen & Salter, 2006), OEMs showcase some significant innovation management issues, prevailing throughout the whole organization (Juell-Skielse & Hjalmarsson, 2017, p. 3). Accordingly, all this is proof that these large corporations are neither ready to face change (Rohrbeck, 2011, p. 34) nor to create disruptive innovations (Chang et al., 2012) yet. Christensen (1997) defines this as the innovator’s dilemma; whereby large organizations nearly solely focus on successful strategies sustaining innovations, but are however, still going to face disruption by start-ups. Hence, to keep their current positions on the market as well as be able to continuously satisfy the fast-changing market demands (Birkinshaw & Hill, 2005), corporates have to engage in disruptive innovations. Whereas intrapreneurship can be a possibility in this regard (Ibrahim, 2016, p. 1765), car manufacturers and other large corporations actively choose to do this through outside-in innovation flows instead (Laursen & Salter, 2006). Correspondingly, firms directed at entrepreneurial orientation show enhanced performances (Rauch et al., 2009; Moreno & Casillas, 2008) and the collaboration with external start-ups, a choice made by 35 per cent of the large corporations in Germany (Depiereux, 2017), exonerates the corporations from possible agency costs, restricted asset complementarity, rigidity and long-lasting administrative processes that play a role for intrapreneurship activities (Henderson, 1993; Anton & Yao, 1995; Klepper, 2001; Helfat & Lieberman, 2002). Both parties working differently (Depiereux, 2017), the focus of the collaboration still lies on similar objectives (Latouche, 2019, p. 40). These are; connecting with customers rather than competitors (Parker, 2011, p. 20) and getting ahead of digitalization through cooperation (Depiereux, 2017). The importance of the collaboration between large corporations, or OEMs in the automotive industry, and external start-ups being established, the benefits, challenges and risks of this relationship will now be further elaborated. Benefits On the one hand, large corporations, when collaborating with start-ups externally, can profit from more efficient and less cost-intensive projects (Latouche, 2019, p. 40) but also innovation-accelerating effects directly related to the start-up’s fast decision-making, flat hierarchies, interdisciplinary collaboration processes (Bullinger et al., 2009), specialized knowledge and general speed (Hogenhuis et al., 2016). Regarding the innovator’s dilemma, the collaboration with external start-ups can enable corporates to address the existence of asymmetries in information and motivation (Christensen, 1997). While the asymmetries in motivation represent the prioritization of significant customers instead of smaller customer segments (Christensen, 1997, p. 113), the asymmetries in information involve the internal divergences of knowledge (Christensen, 1997). Start-ups’ flexibility, agility (Hora et al., 2017, p. 411) and orientation to small markets, which characterizes a suitable landscape for experimentation and the configuration and adaptation of their business model (Matzler et al., 2018, p. 13-14), simultaneously pleasing their growth objectives (Latouche, 2019, p. 40), is therefore the perfect fit. Thus, the facility to obtain governmental allocations, comply with securities laws and the reduced patent application costs (Eyal-Cohen, 2014) are further emphasizing start-ups attractiveness. For automotive

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OEMs, moreover, the start-up cooperation brings in new possibilities regarding the application of digital technologies into new product development processes but also facilitates ameliorations in the context of efficiency, sustainability and security (Juell-Skielse & Hjalmarsson, 2017, p. 2). Finally, these new ventures give the corporates the opportunity to promote themselves in the start-up ecosystem (Latouche, 2019, p. 40), enter new markets and enlarge their customer segments (Latouche, 2019, p. 30), by, at the same time, being vectors of employment and transformation in regard to societal and managerial change (Latouche, 2019, p. 31). On the other hand, start-ups can benefit from large corporations in the opposite ways. Large corporations offer operational scalability and investment capital (Kupp et al., 2017, p. 48), whilst allowing access to resources, market and industry specific knowledge, routines, stability and power (Depiereux, 2017). Risks and Challenges In the same manner, risks and challenges can be present in these relationships. Accordingly, in an asset-based and capital-demanding sector as the automotive industry (Dodourova & Bevis, 2014), where the corporate innovation strategy was routinely closed innovation (Ili et al., 2010) and intellectual property (IP) rights are of extreme relevance (Cooper, 1990), the advantages affiliated with the organization culture, structure and management can be equivalently turned into challenges as well (Freeman & Engel, 2007, p. 94). Uncertainties corresponding to the start-up’s future, risk-taking or the corporation’s expectations may therefore represent an important risk for corporates, including the possibility to lose resources and negatively affect the corporates’ image (Latouche, 2019, p. 30; Quintana-Garcia & Benavides-Velasco, 2004). Additionally, to be able to entirely profit from the collaboration with start-ups and take-in the corresponding advantages it is important for large corporations to adopt similar behaviours (Latouche, 2019, p. 31) and to be patient when it comes to the positive impacts of these relationships (Weiblen & Chesbrough, 2015, p. 88). Furthermore, OEMs act as a gatekeeper in this collaborative ecosystem, acquiring and translating external knowledge and concurrently broadcasting internal knowledge (Whelan et al., 2010). To the contrary, start-ups face the challenge of dependency or vulnerability in regard to established corporations (Chung, 2012; Ketchen et al., 2007; Lechner et al., 2016), which entails weaker bargaining powers (De Rond & Bouchikhi, 2004) and possible losses of resources, knowledge or skills crucial for the well-functioning of the start-up (Ketchen et al., 2007). While on top of this remain restricted funds, profitability, reputation and competitive advantages as well as fragile and new organizational structures, all working towards an increased risk of failure (Latouche, 2019, p. 32; Stinchcombe, 1965). Moreover, two additional challenges, equally important for both players, deal with the duration and implementation of the common project (Latouche, 2019, p. 34). Both the start-ups and the corporates have to be aware and reckon with possible cancelations or delays, however, these are generally much harder on start-ups than corporates (Latouche, 2019, p. 34). Lastly, the collaboration of both parties implies, especially in the eyes of OEMs, a fine line between exploration and exploitation (Hill & Birkinshaw, 2014; O’Reilly & Tushman, 2013). Opportunism is therefore a challenge that start-ups have to be made aware of, taking the form of either imitation or acquiring of private technical or organizational knowledge (Fernandez et al., 2014). Interesting is also the fact that industries, for which less chances to acquire the IP prevail, prove to have less external corporate innovation and entrepreneurship opportunities available (Vázquez Lucerga, 2018, p. 14). Correspondingly, and to avoid a loss of control for the start-ups, formally

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and publicly recognizing the collaboration should be a must (Ritala & Hurmelinna-Laukkanen, 2013). To conclude, the benefits, risks and challenges of this relationship can be summarized and further refined by the following figure (Figure 6), adapted from the World Economic Forum (2018, p. 7-10):

Figure 6: Benefits, Challenges and Risks of the Corporate-Start-up Collaboration (adapted from World Economic Forum, 2018, p. 7-10)

Finally, it is clearly identifiable that start-ups are a significant motor for corporate innovation for large corporations and that even if value can be destroyed by their disruptive innovation capabilities, value is instantly recreated elsewhere (Latouche, 2019, p. 30; Weiblen & Chesbrough, 2015, p. 68). Consequently, Christensen (1997) proposed that the collaboration between large corporations and external start-ups should take place with the help of an independent business entity responsible for the creation of new ventures in the field of disruptive innovation. Additionally, Ruff (2015, p. 45-46) stresses the importance of corporate foresight units; set to ensure internal knowledge development and act as an early-warning system for disruptive innovation, directly involved in the corporate innovation strategy, which should be dependent from a R&D division to avoid parochialism and adopt an outside-in approach. Recent developments in the cooperation between OEMs and external start-ups show that corporate venturing, corporate acceleration or incubation methods are increasingly used to profit from the new opportunities of digitalization (Weiblen & Chesbrough, 2015, p. 72), and in “an attempt to combine digital entrepreneurship with corporate setups, established OEM within the automotive industry have begun to establish corporate incubators like the BMW Start-up Garage and Daimler’s Start-up Autobahn” (Hjalmarsson et al., 2019, p. 6004). 2.4 CIIAs: A Combined Approach of Start-up and OEM Interaction 2.4.1 Corporate Incubators Hausberg and Korreck (2018, p. 13) see incubators as “organizations that support the establishment and growth of new businesses with tangible (e.g., space, shared equipment and administrative services) and intangible (e.g., knowledge, network access) resources

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during a flexible period and are funded by a sponsor (e.g., government or corporation) and/or fund themselves taking rent (or less frequently equity) from incubatees”.

While these incubators can persist under several different forms (Table 2), this research paper will focus solely on the private and corporate side of these specific business units. Table 2: Classification of Start-up Incubators in the Literature (Latouche, 2019, p. 21)

Corporate incubators can therefore be defined as a sub-category of business incubators (Allen & McCluskey, 1990), which showcase the wish for open innovation strategy implementation of large corporations (Chesbrough, 2003; Gassmann & Enkel, 2004) and support the sourcing of knowledge both internally and externally as well as the transfer of knowledge into the different internal organizational departments (Becker & Gassmann, 2006b, p. 11). As a part of the entrepreneurial strategy of corporates (Latouche, 2019, p. 34) and gatekeepers (Tushman & Scanlan, 1981) these kinds of incubators, supplying start-ups with required contacts (e.g. venture capitalists), trainings (Branstad & Saetre, 2016, p. 243; Logue, 2000, p. 26) and knowledge, while trying to fulfil the interests of both involved parties (Latouche, 2019, p. 37). Management expertise and access to funding are therefore supplementary aspects to consider (Siu, 2002, p. 301). Siu (2002) emphasizes this advice and support process directed at start-ups, by adding that incubators “[…] help them to survive and grow during their start-up phase, when they are most vulnerable” (Siu, 2002, p. 301). In a general, incubators thence exist to add value, reinforce the emergence of new innovative ventures and enhance the development of entrepreneurship and synergies (Siu, 2002, p. 301). Even though CIs represent independent for-profit business units (Latouche, 2019, p. 34), funded by a large corporation, similarly to traditional incubators they provide the start-ups with business development advice (Vázquez Lucerga, 2018, p. 24). The duration of the collaboration between CIs and start-ups is not necessarily fixed (Hochberg, 2016, p. 46) and the value creation happens through technology complementation and market segment accessibility (Branstad & Saetre, 2016, p. 243). CIs can be described as either providing a service or developing new technologies through specific collaboration

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methods. These specific collaborations differ depending on the mission of the incubator (inside-out or outside-in approaches), the role of the core organization as well as the relationship to the incubated start-ups (Becker & Gassmann, 2006a; Hjalmarsson et al., 2019, p. 6003) and the corresponding selection criteria (Gertner, 2013). Corporate ownership of the ventures as well as the alignment of their partnering start-ups with corporate goals is not a necessity in this context (Hjalmarsson, 2019, p. 6004). The goals are primarily to foster innovation (Kohler, 2016), create and manage knowledge (Rice, 2002) and correspondingly maintain or build a competitive advantage for the core organization (Becker & Gassmann, 2006a). The innovativeness of the CIs is also reflected in the set-up of its physical space, a traditional component of incubators (Von Zedtwitz & Grimaldi, 2006), whereas its entrepreneurial spirit can be illustrated by its risk-taking approach being one of the strategic drivers for sustainable development (Baraldi & Ingemansson, 2015). An additional aspect to consider when it comes to corporate incubators, is that they are most efficient when separated from the core organizations’ rigidity and complexities both in structure and decision-making (Grimaldi & Grandi, 2005). Moreover, CIs’ networking capabilities should not only be centred inside the company (Becker & Gassmann, 2006b, p. 13) or on their collaborations with start-ups but also target the right connections inside their stakeholder ecosystem (Grimaldi & Grandi, 2005). In the end, comparable with corporate accelerators, the search for a corporate fit between the two key players, makes sure that the new ventures’ vision and purpose are aligned with the corporates’ strategy (Vázquez Lucerga, 2018, p. 24). 2.4.2 Corporate Innovation Labs Another possibility of OEM and external start-up interaction, and an equally important answer to the dynamic and uncertain market conditions, however, still relatively new to researchers (Magadley & Birdi, 2009, p. 317), can be found in the recent emergence of innovation labs (Kuratko & Audretsch, 2013; Ovesen, 2012). Innovation Labs (ILs) can accordingly be either an internal or external business unit of the company, whereby the purpose of such entities is to activate the creativity of all participants and create new innovative products, services or business models through a highly dynamic process (Christensen & Overdorf, 2000; Halinen & Tönroos, 2005; Leminen, 2015; Lewis & Moultrie, 2005; Magadley & Birdi, 2009) and give entrepreneurs the chance to prototype, create a MVP as well as validate their products or services (Juell-Skielse & Hjalmarsson, 2017, p.4; Vázquez Lucerga, 2018, p. 115). The success not being elaborated in this context yet, ILs are centred around participants interactions and the effectiveness of the teams (Fecher et al., 2018, p. 1-2). Cross-functional interplays and dynamics together with a greatly experienced team determine the effectiveness and moreover, the final success of such ILs (Magadley & Birdi 2009; Moultrie et al., 2007; Ray & Bronstein, 1995). Furthermore, the physical space, human facilitation and resources are the three main characteristics portraying ILs (Gryszkiewicz, et al., 2016; Memon & Meyer, 2017). Thus, time and technology are therefore only surrounding aspects of this efficient interplay (Magadley & Birdi, 2009). Separated from the traditional corporation, ILs create an engaging and unique atmosphere that promotes and boots innovative creativity as well as thinking outside-the-box (Lewis & Moultrie, 2005; Magadley & Birdi, 2009, p. 315; Moultrie et al., 2007). Additionally, the availability of financial and technical resources (e.g. equipment, outside expertise or the outsourcing of activities) will enable outsourcing and access to materials and external expertise. A neutral trainer and mentor, called facilitator (Schwarz, 1994), is equipped with the innovation method approaches and helps the participants surpass their challenges. Participants will mainly identify needs, plan and forecast customer demand as well as focus on, problem solving, idea

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creation, concept development, design, prototyping, testing and implementation (Marques & Cunha, 2014; Memon & Meyer, 2017). However, even if successful and highly innovative, the core enterprises still have to “transfer the generated innovations and acquired skills back into their corporate structures” (Fecher et al., 2018, p. 2). Principally directed at optimization through concept and exploratory analysis, system viability and the development of a proof of concept or product add-ons (Vázquez Lucerga, 2018, p. 23-24), CILs display agility and open up the doors to a broad ecosystem consisting of clients, experts, new ventures and other organizations’ internal department teams (Fecher et al., 2018, p. 9). According to Gonzalez (2014) to be able to recognize new business occasions the harmony between inside and outside knowledge as well as the active engagement with customers is thence of extreme relevance. In the context of the automotive industry, Innovation Garages, as for example, the BMW Start-up Garage, Renault Cooperation I-lab, Daimler and Mercedes Benz Start-up Autobahn, and Jaguar Land Rover Tech Incubator newly surfaced, with the main objective of OEMs to engage with developers outside the traditional corporate boundaries and, at the same time, respond to the challenges of this new digital area (Juell-Skielse & Hjalmarsson, 2017, p. 4). To conclude, as for corporate incubators, ILs are based on agile, innovative and educational prospects, created to engage in promising business opportunities and respond to the movement of digital transformation (e.g. Carlsson et al., 2002; Meyer & Marion, 2010). 2.4.3 Corporate Accelerators Closely related to corporate incubators, both CIs and CAs assist new businesses in the fields of marketing, finance, HR, legal, administrative and technical services (Drain, 2015, p. 12; Latouche, 2019, p. 24), often in forms of workshops (Dempwolf, 2014). Offering “a plethora of networking opportunities, with both peer ventures and mentors, who might be successful entrepreneurs, program graduates, venture capitalists, angel investors, or even corporate executives” (Cohen, 2013, p. 19), they support start-ups in their venture creation process (Cohen, 2013). In comparison to incubators however, accelerators or acceleration programs are established on a short-term cohort approach (Hochberg, 2016, p. 46), mostly guiding start-ups that “already have marketable or marketed products and services” (Latouche, 2019, p. 24). Resulting out of the need to offer more than just a physical space and a strictly internal business development assistance (Bruneel et al., 2012), their main purpose is to accelerate start-ups growth (Latouche, 2019, p. 24). This form of strategic cooperation, established on frequent meetings and the possibility of remote work, brings experts and young entrepreneurs of similar industries as well as potential investors all together, whereas investors meet the start-ups on a so-called Demo Day and provide funding through an exchange of capital for ownership (Dempwolf, 2014; Serwatka, 2018, p. 76-77). Moreover, corporate accelerators are “company-supported programs of limited duration that support cohorts of start-ups during the new venture process via mentoring, education, and company-specific resources” (Kohler, 2016, p. 348). Accordingly, five different types of CA methods are highlighted by Hochberg (2016, p. 44-45). Correspondingly, the first and most primitive, gives corporates the chance to become mentors or investors in an independent private accelerator. The second involves outsourcing the accelerator management, as for example through Techstars, while the third and fourth model consists in either owning and running it by themselves or partnering with other large corporations to implement a multiple partnership accelerator.

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The final and fifth type compromises an in-house accelerator program, only involved with intrapreneurship (Hochberg, 2016, p. 44-45). Therefore, at least four of these can be identified as an intermediary between corporations and innovative external start-ups, figuring mostly in one industry (Bliemel et al., 2013; Kohler, 2016). In general, CAs can be differentiated from other types of accelerators especially when focusing on the following aspects: corporate fit, the proximity to the corporation’s offices, the exchange of supporting resources against complementary products or services (or extending upstream or downstream approaches) but also the possibility of either seed investment or the joint elaboration of complementary products or services, yet staying independent (Vázquez Lucerga, 2018, p. 23). Other defining characteristics of these programs are the for-profit business model (Cohen, 2013), a close relationship to the company’s business units to define the challenges that will be addressed by the start-ups (Vázquez Lucerga, 2018, p. 114), open application procedures and the focus on co-founded groups of start-ups (Kohler, 2016), called cohort (Hochberg, 2016, p. 46). Finally, with accelerator portfolios including mainly software and services ventures (Hochberg, 2016, p. 43), the main goals of CAs lie in the spinning-in of outside innovation, the reinforcement and creation of intra-organizational innovation through collaboration as well as organizational culture renewals and attraction of talent (Kanbach & Stubner, 2016; Kohler, 2016). To sum up, Pauwels et al. (2016, p. 17) and their attempt to illustrate the design elements and constructs of accelerators (Figure 7), outline the key aspects defining their principal activities (Zott & Amit, 2010).

Figure 7: Design Elements and Constructs of Corporate Accelerators (Pauwels et al., 2016, p. 17)

Finally, Pauwels et al. (2016, p. 21) additionally enlighten us on three different approaches, connecting and coordinating these five design elements (Zott & Amit, 2010). Accelerators can therefore be either, welfare simulators, deal-flow makers or, in the case of corporate accelerators especially, ecosystem builders. Ecosystem builders are therefore

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created with the wish to build an ecosystem around all the companies’ stakeholders, offer corporate mentors and create and capture value through the process of matching successful new businesses with star customers. This new form of corporate accelerators thereby dismisses the traditional for-profit orientation and seed investment opportunities to solely concentrate on soft performance measures and regularly engage in marketing activities (e.g. events and newsletters) to prove their viability (Pauwels et al., 2016, p. 21; Zott & Huy, 2007). 2.4.4 CIIAs Whereas the three CV activities, previously illustrated, are constantly evolving (Bruneel et al., 2012) together with the wish of automotive OEMs to bring only little changes to the corporate structures or culture (Hjalmarsson et al., 2019, p. 6001), individualized forms of these corporate open innovation strategies are constantly arising (Vázquez Lucerga, 2018, p. 13). Yet, a thorough literature review points out that a leading classification has not yet been promoted (Schuh et al., 2017, p. 2). Accordingly, Vázquez Lucerga (2018, p. 20) categorizes these approaches by focussing on the ideas and resources flow as well as the possibility of an equity ownership (Table 3). Table 3: Forms of Corporate-Start-up Innovation Strategies (Vázquez Lucerga, 2018, p. 20)

Additionally, considering the fact that the line within and between CIs, CILs and CAs models is, to this date still, very vague and flexible (Carayannis & von Zedtwitz, 2005; Gertner & Mack, 2017, p. 2; Latouche, 2019, p. 24) as well as the possibility that these specific entities can be characterized by more than one of these strategies (e.g. Hjalmarsson et al., 2019, p. 6004; Juell-Skielse & Hjalmarsson, 2017, p. 4; Pauwels et al., 2016, p. 14; Vázquez Lucerga, 2018, p. 114-115), it is most important to keep in mind that they are all based on a similar phenomenon (Schuh et al., 2017, p. 2) displaying complementary capabilities, goals and visions (Juell-Skielse & Hjalmarsson, 2017, p. 8). Appropriately, to support new promising businesses, create value and competitive advantages and successfully enhance innovation and economic growth for both large corporations and external new ventures (Gertner & Mack, 2017, p. 2; Isabelle, 2013; Prajogo & Ahmed, 2006). In accordance with the recent transformations and challenges faced by OEMs, suppliers and start-ups in the automotive industry, Juell-Skielse and Hjalmarsson, (2017, p. 8) state that the combination of the concepts of innovation garages and business accelerators could be extremely beneficial. Besides, the focus of this master thesis being purely based on the relationship of CIIAs with external start-ups, the availability of a physical space (Moultrie et al.; 2007), including all start-up maturity stages, focusing on the initial stage of the relationship (Vázquez Lucerga, 2018, p. 115),

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finding the cure to the arising digitalization challenges (Kuratko & Audretsch, 2013) and combining outside-in and inside-out equity and ownership open innovation strategies related to these collaborations, together with well-defined transition and deal flow processes, became important (Vázquez Lucerga, 2018, p. 114). Based on Vázquez Lucerga’s (2018, p. 114-115) model for integrated open innovation, we thereby decided to merge the features of CIs, CILs and CAs and created corporate incubators, innovation labs and accelerators, in short CIIAs. Accordingly, the accelerator module could take over the scouting and selection responsibilities (stage 1), the innovation lab could support the external start-ups in their product testing and development phase (stage 2), while the incubation period (stage 3) would be concerned with revenue generation and scalability (see Vázquez Lucerga, 2018, p. 114-115). However, these three CIIA stages (Figure 8) do not necessarily have to follow a specific order, as they are equally interrelated.

Figure 8: The Three Stages of CIIAs

What is more, in light of possible correlations with corporate foresight units, the following key aspects should be included in the CIIA features: diversity, flexibility and long-term orientation; the focus on new and complementary discoveries; as well as the proof of value creation and rightful implementation into the corporate innovation strategy (Ruff, 2015, p. 47). To sum up, it has been previously demonstrated that CIIAs, alongside modules-specific facets, foster innovation and entrepreneurship in the age of increasing digitalization, manage internal and external technology transfers (Vázquez Lucerga, 2018, p. 115) while building competitive advantages for large enterprises and external start-ups simultaneously. However, some additional motives and challenges might be present in these relationships. Correspondingly, these will be addressed in the next section. 2.4.5 Motives and Challenges of the CIIA and Start-up Relationship Aside from being a combination of the individual drivers and challenges of CIs, CILs and CAs, CIIAs can equally establish new motives and challenges as a consequence of this combination. Correspondingly, the main motives of corporations (and accordingly CIIAs) and start-ups can therefore be adapted from the illustrations of the strategic intents by Vázquez Lucerga (2018, p. 97-103), recognized as key success factors in the CIIA regard (Bauer et al., 2016; Kanbach & Stubner, 2016; Kohler, 2016) and will now be further developed through a thorough literature review in this regard. Motives When considering the corporates and accordingly the CIIAs perspectives, the following main motives are crucial (Table 4);

Table 4: CIIAs Motives

Motives Details Close Innovation Gap Staying on top of market developments and

acquiring innovative suppliers (World Economic Forum, 2018, p. 7); new ventures as “outsourced R&D” (Prats et al., 2017, p. 9); discoveries and

STAGE 1Start-up Scounting &

Selection

STAGE 2Product Development

& Testing

STAGE 3Profitability &

Scalability.

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innovations new to existing business functions (Vázquez Lucerga, 2018, p. 97); explore new and complementary business models (Weiblen & Chesbrough, 2015; Kohler, 2016); foster corporate innovation, co-produce innovative products or services and refine own products and services (Weiblen & Chesbrough, 2015); counteract against creative destruction (Hochberg, 2016, p. 44); satisfy changing customer needs and develop faster product life cycles (Meyer & Marion, 2010).

New Market Expansion Profit from competitive advantages in new sectors or industries (Vázquez Lucerga, 2018, p. 97); start-up as a customer (Weiblen & Chesbrough, 2015); follow new trajectories (Levitt & March, 1988; Levinthal & March, 1993); engage in the start-up ecosystem (Hochberg, 2016, p. 447).

Corporate Culture Transformation Long-term innovation orientation (Vázquez Lucerga, 2018, p. 97); entrepreneurial and agile culture (World Economic Forum, 2018, p. 7); increase flexibility (Vázquez Lucerga, 2018, p. 130); create start-up-like environments (Schuh et al., 2017, p. 2), eliminate core rigidities (Leonard-Barton, 1995); independent business unit to shield from corporate complexity (Kohler, 2016), use an output-oriented approach (Meyer & Marion, 2010).

Talent Acquisition & Retainment Development of internal and external entrepreneurial talent (Vázquez Lucerga, 2018, p. 97); retain most valuable employees (Becker & Gassmann, 2006b, p. 13).

On the other hand, new ventures engage in the relationship with CIIAs based on the following factors (Table 5); Table 5: Start-up Motives

Motives Details Access to Resources Acquire complementary assets (Vázquez Lucerga,

2018, p. 103); access resources, knowledge, experts, and long-term contacts (Leonard, 2014; Hochberg et al., 2015); profit from high informational quality and relevant knowledge (Gassmann & Becker, 2006, p. 11); transfer of tacit knowledge (Miles & Snow, 1986); gain knowledge about international markets (Bell et al., 2003); incorporate corporate stakeholders (Sarasvathy et al., 2014).

Economies of Scale Decrease costs (e.g. for the investment search) (Hochberg, 2016, p. 32-33), profit from economies of scale (Gassmann & Becker, 2006, p. 11)

Support & Physical Space Support for pilot project (Kohler, 2016); open innovation community (Waguespack & Fleming, 2009); cross-fertilisation of ideas (Battistella et al., 2017, p. 86); relieve uncertainty and restricted knowledge for decision-making (Levitt & March, 1988; Levinthal & March, 1993); possibility of collaboration with other start-ups as well as engage in pitch trainings (Hochberg, 2016, p. 32-33); guidance for business development (Christiansen, 2009).

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Increase Credibility Visibility and credibility enhancement supporting the product development (Vázquez Lucerga, 2018, p. 103); opportunity to promote of innovation and entrepreneurship (Wong et al., 2005).

Proof of Concept Achieve profitability (Latouche, 2019, p. 24); test ideas and develop new technologies (Chen & Wang, 2008; Sullivan & Marvel, 2011).

Talent Acquisition Increase employment capability (Eftekhari & Bogers, 2015; Scillitoe & Chakrabarti, 2010).

Access to Markets Possibility for fast expansion into new markets, (e.g. geographical expansion, new clients or channels) (Vázquez Lucerga, 2018, p. 103); future sales opportunities, a scalable customer base, attractive retail channels and a riskless internationalization (World Economic Forum, 2018, p. 7); opportunity to identify and exploit market opportunities (Chen & Wang, 2008; Sullivan & Marvel, 2011); corporations as a client or distribution partner (Kohler, 2016) as well as growth acceleration (Hoffman & Kelley, 2012).

Funding Access to funding through an increase in credibility (Vázquez Lucerga, 2018, p. 103); or simply obtain better access to funding (Pettersen & Tobiassen, 2012); possible acquisition by corporations (Kohler, 2016) and the opportunity to pitch to investors (Hochberg, 2016, p. 32-33)

To conclude, both parties can benefit from these relationships through their participation in the open innovation community (Waguespack & Fleming, 2009) and the according organizational learning processes (e.g. learning about customer needs) (Fredriksen et al., 1990; Smilor, 1997; Sætre, 2003; Walter et al., 2006) as well as the decrease of costs and enhancement of efficiency (Vázquez Lucerga, 2018, p. 130). Additionally, the co-creation knowledge can also be seen as a driver for economic growth (Karatas-Ozkan et al., 2005, p. 42). Challenges After the elaboration of the drivers of these relationships, it is equally important to highlight the risks and possible challenges that can be faced by either CIIAs or the external new ventures in this regard. When it comes to CIIAs, the pressure to develop a successful organizational structure and the ability to create value (Bruneel et al., 2012) are at the forefront of all challenges. Accordingly, suitable support measures, as for example the proactive providence of guidance or adaptable mentoring techniques, have to be in place (Rice, 2002). The CIIAs being small entities themselves, also face the challenge of strategic uncertainties and inexperienced management (Birkinshaw, 2005; Solis et al., 2015). However, highly trained employees and the resulting effective assistance are crucial for the process of value co-creation (Branstad & Saetre, 2016, p. 253). The managers therefore need CIIA specific capabilities and skills, which involves developing their technical, industry-specific but also social competences (Branstad & Saetre, 2016, p. 254). Additionally, the non-profit orientation (Goldstein, 2015), the deficit of transparency in regard to intellectual property (IP) mechanisms (Juell-Skielse & Hjalmarsson, 2017, p. 8) and the possibility for misplaced investments, a waste of resources and an increase in costs (Solis et al., 2015) can be seen as further challenges that CIIAs have to cope with. As for

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corporates, the harmonizing stakeholders’ conflicting goals (Alsos, Hytti, & Ljunggren, 2011) and the focus on a long-term perspective are required (Abetti, 2004). Lastly, these time intensive forms of collaborations (Rice, 2002) not only consume a lot of resources, time and money, sometimes without considerable benefits (Cooper, 2014; Solis et al., 2015), but are also associate with long implementations processes and the issue of profitability (Smilor, 1987). On the new ventures’ side, the protection of the IP and the possibility of conflicts in connection with other start-ups associated with the CIIA (Sá & Lee, 2012) involve further risks and challenges to consider. Instead of the opportunity for collaboration (Hochberg, 2016, p. 32-33), competition between the tenants may therefore arise due to similar business interests, restricted resources or the limited availability of partners or clients (Sá & Lee, 2012). In addition, other entrepreneurial teams being too divergent (Tötterman & Sten, 2005, p. 503), the absence of trust and the fear of non-confidentially might significantly affect the open sharing culture of the CIIAs (Cooper et al., 2012). Moreover, corporate opportunism and other systematic risks could be prevented or counterbalanced through formal contracts, whereas these, however, affect the trustfulness of the relationship (Branstad & Saetre, 2016, p. 253). Finally, the start-ups expectations of being provided with fruitful new contacts or complementary resources through the collaboration with CIIAs might not always be met (Sá & Lee, 2012; Tötterman & Sten, 2005, p. 503). In the end, efficiency, especially in regard to the time-confined cooperation, and an equal dedication to the implementation of a valuable learning culture are the keys to success. (Branstad & Saetre, 2016, p. 254; Pauwels et al., 2016, p. 15). However, in the context of digitalization, where innovations, products or services can hastily become out-of-date, such cooperation’s are constrained and could be considered as still too rigid and linear (Cooper, 2014). To conclude, an overload of challenges for corporates induces the necessity of drastic change and could even lead to the closing-down of such CIIAs, if not overcome (Smilor, 1987). Consequently, the importance to find the most appropriate type of interaction between CIIAs and external start-ups is therefore indispensable to ensure successful relationships and will thence be discussed in the next chapter. 2.5 A Coopeting Relationship 2.5.1 Definition of Coopetition Coopetition can be described as a corporate strategy, where cooperation and competition between the involved parties happen simultaneously (Bouncken et al., 2015, p. 591; Brandenburger & Nalebuff, 1996). According to da Costa et al. (2009) and the game theory competition is thereby the motivation whereas collaboration is the key to success. It symbolizes a relationship whereby value or resources are jointly created at first, to be, in the later stages, captured by competition (Bouncken et al., 2015, p. 591; Estrada et al., 2016; Gnyawali & Park, 2009). Coopetition therefore not only aligns coopetitors interests toward a common goal but also creates increased opportunities for competitive advantages (e.g. sales growth, market expansion, international reputation and new market entries (Rodrigues et al., 2011)) and a higher appropriation of value (Ritala & Tidström, 2014) through the decrease of external challenges and threats (Chin et al., 2008, p. 438). Encouraging synergies and innovation, the sharing of complementary resources (e.g. R&D activities), skills or expertise (Bengtsson & Kock, 2000; Gnyawali & Park 2009; Ritala et al. 2016; Walley 2007) but also the effects on trust and commitment (Tidström, 2014) play a major role. Mostly used as a base for new product development and a

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sustaining innovation strategy (Bouncken et al., 2017), coopetition leads to long-term growth (Hora et al., 2017, p. 413), an increased number of customers, more ownership and better performances (da Costa et al., 2009). Consequently, coopetition should be seen as a leading way for coopetitors to acquire managerial, commercial and technological capabilities (Quintana-Garcia & Benavides-Velasco, 2004), together with the sharing of risks and costs (Gnyawali & Park, 2009). Furthermore, the right friend-rival balance implicating knowledge sharing and knowledge protection is of crucial importance for the right implementation of coopetition (Bouncken & Kraus, 2013; Pellegrin-Boucher et al., 2013). Nevertheless, tensions and risks may arise on the different organizational as well as project levels (Fernandez & Chiambaretto, 2016), especially in regard to hidden agendas (Fernandez et al., 2014), opportunism or knowledge leakage (Bouncken & Kraus, 2013; Pellegrin-Boucher et al., 2013) and the control over important resources with little alternatives (Pfeffer & Salancik, 1978). Most challenging is thereby the management of coopetition (Gnyawali & Park, 2009). Increasingly relevant in our fast-paced and highly digitalised and innovative environment (Bouncken et al., 2017; Gnyawali & Park, 2009), the concept of coopetition, however, is not a recent phenomenon when it comes to the automotive industry (Bengtsson et al., 2010).

2.5.2 Coopetition between OEMs & External Start-ups The previous sections elaborated the strategic and competitive opportunities that can result out of coopetition and showed the necessity for large corporations to coopete. Successfully managed large firms, of all maturity levels, tend to keep their innovation capabilities in their fields of expertise (e.g. existing products and customer improvements) rather than to activate disruptive innovations through new products, services and customer segments (Christensen, 1997). However, survival potentials can only be stimulated and activated through the engagement with disruptive innovations (Ibrahim, 2016, p. 1765). And while Ibrahim (2016, p. 1765) describes in-house innovation methods and corporate venture capital as the two only possibilities to activate this survival potential, start-ups are at the forefront. In contrast to collaboration, competition exists when trust is discouraged (Drain, 2015, p. 27), interactions with other market players or resources are limited (Browning et al., 1995, p. 122) and competitors exhibit distinctiveness (Drain, 2015, p. 27) to ensure competitive advantages. Nonetheless, competitive advantages can additionally result from the speed of new product development (Christensen, 1997), talent acquisition and sustainment as well as investment capacities (Kupp et al., 2017, p. 48), whereas success, as a key enhancer of competition (Freeman & Engel, 2007, p. 117), plays a major role. Successful entrepreneurs getting increased attention, competition tendencies between start-ups but also with corporates gain in importance (Freeman & Engel, 2007, p. 117). Even if much smaller and therefore less capital, legitimacy, partnerships and talents (Freeman & Engel, 2007, p. 94), start-ups were never able to entirely compete with larger corporations for the control over key technologies and resources until now (Ferràs-Hernández et al., 2017, p. 856; Kupp et al., 2017, p. 47). Accordingly, digitalization brought the opportunity of scale of large corporations to an end by allowing start-ups to break down industry-explicit value chains into niche markets, where smallness and expertise are now the key factors of success (Kupp et al., 2017, p. 47). Additionally, together with the innovator’s dilemma (Christensen, 1997), the competitive advantages stated by Kupp et al. (2017, p. 48) are not unique to OEMs anymore, and are supplemented by the start-ups’ structural

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(bureaucratic and legal) ease, their flexibility and their possibility of offering cheaper products or services as well as better addressing the needs of their customer segments (Foster, 1988; Kupp et al., 2017, p. 47). Accordingly, start-ups and large enterprises each display resources and skills that are needed by the other party, which clearly emphasizes the attractiveness of coopetition in this specific context (M’Chirgui, 2005). While start-ups can provide the corporates with innovative ideas or involve them in fast, flexible, agile and risk-taking approaches, established business, on the contrary, can offer resources, expertise and stability (Bouncken et al., 2015; Hora et al., 2017, p. 411). Kohler (2016) states that the start-ups’ expectations in relation to cooperation can be classified into the following four categories: access to resources, increase in credibility, access to markets and funding. However, start-ups prove to be at the origin of innovation and disruptive technologies, which justifies the significant potentials for corporations to develop innovation and create new innovative opportunities with them (Becker & Gassmann, 2006a; Kohler, 2016). Corporations on the other hand, have to establish and maintain their competitive advantages to be able to stay attractive (Weiblen & Chesbrough, 2015). In conclusion, start-ups’ motives to engage in coopetition can be mainly characterized by the access to the corporation’s internal resources and the increase in sales opportunities (Hora et al., 2017, p. 427), whereas corporations can exploit the innovation capabilities, and profit from new disruptive ideas and technologies (Hora et al., 2017, p. 430). Hence, small firms’ vulnerability and low bargaining powers towards large and settled enterprises (Chung 2012; De Rond & Bouchikhi, 2004; Lechner et al., 2016), makes room for larger corporation’s opportunism, particularly regarding product imitations or the acquisition of knowledge (Fernandez et al., 2014). On the contrary, the collaboration with start-ups represents an uncertain landscape, where the loosing of resources and reputation can occur (Quintana-Garcia & Benavides-Velasco, 2004). Notwithstanding, start-ups, even if attractive indirect competitors (Kraus et al., 2017), are less engaged in the coopetitive relationship than their opposed corporates due to time constraints and undeveloped core competencies (Morris et al., 2007a). As a result, they endure the risk of becoming dependent of large corporations (Ketchen et al., 2007), but also experience the same challenges, thus sharing the same context (Gnyawali & Park, 2009, p. 312). The next section will thereby expand on the aforementioned coopetitive aspects of large corporations and external start-ups’ relationship, by showcasing some CIIA specific coopetitive factors. 2.5.3 CIIA and External Start-up Coopetition: A Conceptual Framework In the light of the increased digitalization and the urgency of successful open innovation strategies and competitive advantages in the automotive industry, the need for OEMs to coopete with external start-ups through CIIA identical entities or structures drastically gained in importance (Chesbrough & Bogers, 2014; Hjalmarsson et al., 2019, p. 6001; Ritala & Sainio, 2014). Correspondingly and in the context of intrinsic new product or service development, coopetition is most relevant when these large corporations are confronted with time and resources constraints (Ganguli, 2007; Walley, 2007). Along with the motivation to access new knowledge externally (Bengtsson & Kock, 2000; Mas-Tur & Soriano, 2014), develop the according organizational structures (Gnyawali & Park, 2011) and create additional value (Bouncken et al., 2015), corporates thereby engage in coopetition. As Dagnino (2009, p. 25–26) states: “cooperation and competition merge together to form a new kind of strategic interdependence between firms, giving rise to a

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coopetitive system of value creation”. A well-established balance between cooperation and competition has therefore beneficial implications on the organizational learning culture, decreases costs and amplifies creativity and innovation (Luo et al., 2006) while, at the same time, combined with intensive guidance, reinforcing start-ups’ growth opportunities (Cohen, 2013). Furthermore, the challenging tensions between value creation and capture in innovative settings (Ritala & Hurmelinna-Laukkanen, 2009) as well as the increased desire of large businesses to interact in collaborative relationships with external start-ups instead of competing against them (Kupp et al., 2017, p. 48) leads us to Akpinar and Vincze (2016) and their in-depth analysis of the dynamics of coopetition between the Volkswagen Group and the Porsche AG in an eleven years’ time period. Respectively, the four possible types of coopetition in this context where; weak coopetition, cooperation-dominant coopetition, competition-dominant coopetition and balanced-strong coopetion (Akpinar & Vincze, 2016, p. 60), further refined by the authors through the integration of the dynamics between power difference and common stakes (Table 6).

Table 6: An Explanatory Typology of Coopetition (Akpinar & Vincze, 2016, p. 56)

The power difference can be characterized by the importance of resources, the control over resources as well as the possible alternatives of these resources (Pfeffer & Salancik, 1978), whereas the common stakes “refer to the sum of the joint stakes of the two firms in each other in the form of equity ownership, a contract, shared risk through joint investments, goal commonality, shared economic interests, a common threat or enemy, a shared vision, common legal concerns, or a common culture” (Laplume et al., 2008, cited in Akpinar & Vincze, 2016, p. 55). Additionally, not only trust enhances as the common stakes evolve over time (Castaldo & Dagnino, 2009; Freeman, 1984; Gnyawali & Park, 2011; Tidström, 2014) but also the risk of opportunism, closely related to the power difference, decreases in case of indirect competition (Kraus et al., 2017; Tidström, 2014). Appropriately, when it comes to the relationship between external start-ups and CIIAs; their need for competitive advantages, value creation, innovations or economic growth (Gertner & Mack, 2017, p. 2; Isabelle, 2013; Prajogo & Ahmed, 2006), access to resources and markets (Vázquez Lucerga, 2018) and the wish to co-create products or services (Weiblen & Chesbrough, 2015), clearly indicate high common stakes. On the contrary, both being small independent entities (Birkinshaw, 2005; Hora et al., 2017, p. 411) and mostly committed to the exchange of complementary resources, controlled by each of them individually, or the discovery of new resources (Leonard, 2014; Hochberg et al., 2015; Vázquez Lucerga, 2018), with little to no alternatives, implies a weak power difference. Finally, in the attempt to illustrate the key aspects, dynamics and tensions of the possible cooperation-dominant coopetition between CIIAs and external start-ups, and combining the empirical findings of Hora et al. (2017, p. 419) with the strategic intents of Vázquez

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Lucerga (2018, p. 97-103) and the explanatory variables of Akpinar and Vincze (2016, p. 56), we propose the following conceptual framework (Figure 9).

Figure 9: CIIAs, External Start-ups and their Coopetitive Landscape

Hora et al. (2017, p. 419), performed a multiple case study of 35 coopetitive collaborations between 70 Austrian based start-ups and corporates. Their empirical findings therefore highlight the main coopetitive motives as well as the key aspects in regard to the management and implications of coopetition, all relevant to further illustrate sthe coopetition strategy present between OEMs, and accordingly CIIAs, and external start-ups. Similarly, our conceptual framework portrays the coopetitive landscape between CIIAs and external start-ups by first illustrating the key motives of the engagement in coopetitive relationships. A clear distinction between the drivers of both parties is here of outmost importance to further characterize the differences in reasons for these commitments. These key motives defining the base of this coopetitive relationship, therefore induce the management as well as the possible implications that result out of this coopetition. Finally, and in light of Akpinar and Vincze’s (2016, p. 56) typologies of coopetition, we further elaborated our conceptual framework by adding the influences of the common stake and the power relation, activated respectively through the presence of the collaboration and competitional tensions. The balance between the common stake and power relation therefore not only weight on the management and the implications of the coopetitive relationship between CIIAs and external start-ups but also clearly affects the main motives. Thus, we used the term power relation instead of power difference, as we wanted to emphasize on the fact that the relationship between both parties is based on the wish for complementarity and not divergence (e.g. Weiblen & Chesbrough, 2015; Kohler, 2016; Vázquez Lucerga, 2018, p. 103). However, to strengthen and support the overall validity of this conceptual framework, the empirical findings will be needed.

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3 Methodology In this chapter of the thesis, we will explain the used research methodology. We will thereby firstly describe our choice of subject, the literature selection and source criticism, the research philosophy as well as the research approach and design. Through the use of literature, we will then discuss the different aspects of the methodology and argue for our selected methods. 3.1 Research Methodology 3.1.1 Choice of Subject In today's dynamic and fast changing business environment, innovations are happening at a fast rate, products have shorter lifespans, and this is all happening with the surge of new innovative ventures. Managers have seen the increasing need for more collaboration among businesses and start-ups, in the drive to cope with these fast-changing innovations and markets dynamics. Researchers alike have focused on studying these concepts to have a better understanding of these relationships (e.g. Bengtsson & Johansson; 2012 Juell-Skielse & Hjalmarsson, 2017; Schöll & Hirte, 2018; Schuh et al., 2017; Weiblen & Chesbrough, 2015). Appropriately, large corporations nowadays see the necessity in the cooperation with external start-ups, which we aim at further understanding in the context of the German automotive industry and corporate open innovation strategies. Additionally, a concept named coopetition, which embodies a simultaneous cooperation and competition among businesses, is termed as a “winning strategy” (Yami et al., 2010). The corporate open innovation methods as well as strategic entrepreneurship, which define how firms explore and exploit opportunities in their markets, can therefore be further linked to the concept of coopetition. Following the thought that the best approach for the selection of a research topic is to choose out of interest, which will respectively motivate the research process (Saunders et al., 2009, p. 22; Gray, 2004, p. 35), our choice of subject was appropriately inspired by the wish to further understand the special collaboration methods and the relationships that exists between large automotive corporations and their partnering start-ups, especially in the light of innovation being a key success factor in today’s dynamic, globalised and digitalized business environments. Correspondingly, we are two master students enrolled in the master program of business development and internationalisation, through which we participated in courses related to the fields of entrepreneurship, innovation management, corporate strategy and business growth. These thereby equipped us with some prerequisite knowledge about corporate innovation and entrepreneurship as well as the creation of new ventures, giving us the possibility to choose a known topic related to start-ups and the innovative and entrepreneurial environments inside of large corporates. Furthermore, in addition to Ismaila being the co-founder of a start-up in the Gambia, Julia previously worked in the German automotive industry as well as participated in one of Europe’s leading technology conference in Lisbon in the last year, where she listened to a few speeches raising awareness about corporate open innovation strategies and their planned implementations. Respectively, this further concretised the research topic and lead to the wish to analyse the coopetitve relationship between OEMs and external start-ups in the context of corporate open innovation strategies, positioning it in the German automotive industry. To conclude, as the knowledge and experience of researchers reasonably influence the selection of a research topic (Gray, 2004, p. 35), we genuinely believe that our combined interests, the acquired preliminary knowledge as well as previous experiences can all be considered as an advantage aiming at a highly qualitative exploration of the chosen research topic.

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3.1.2 Literature Selection and Source Critics The choice of the topic as well as the literature review and selection characterize important stages in the writing of a thesis, which means that they go-hand-in-hand when it comes to conducting a suitable research (Sharp, 2002, p. 82). A “critical literature review” in the relevant research field is therefore indispensable (Bryman & Nilsson, 2011, p. 91-92; Saunders et al., 2009, p. 58) and clearly determines the quality of the research. Through a thorough literature review we therefore tried to identify the literature that would be most appropriate for our study (Cottrell, 2003, p. 232) and were also able to simultaneously identify research gaps present in our relevant research field. While the concept of coopetition was introduced to us through our master program lectures, the combination with the topic of corporate open innovation strategies in the German automotive industry was motived by Julia’s previous work experience and her participation at the Web Summit 2018. Accordingly, our literature search was mostly based on a thorough review of academic articles and journals available at the Umeå University Library and its related databases (e.g. Ebsco, Emerald, DIVA portal, etc.). In addition, other literature sources including e-books, textbooks as well as company white papers, easily accessible, were used (Saunders et al., 2009, p. 69). To determine the relevance of the articles in regard to our research topic, we first read the abstract, followed by the introduction and conclusion while then moving into the main body of the literature, when characterized as significant. We know that the credibility of our research is highly influenced by the source criticism and with the use of peer reviewed articles, from the databases, we therefore gained an advantage to get reliable sources. Through the medium of Google.com we then acquired further knowledge and were able to correctly frame our topic. Additionally, a further literature review and selection was done by using insights coming from international conference proceedings and master theses, whereby we especially focussed on Andersson and Eriksson (2018) as well as Nguyen and Nafula’s (2016) work regarding the aspects of coopetition. Additional online articles were also used to gather further information. Furthermore, according to Saunders et al. (2009, p. 65) identifying relevant theories or referring to experts is critical to attain a good literature review. Therefore, to gain more credibility we used the work of influencing pioneers, as for example, Bengtsson, Bouncken, Chesbrough, Christensen, Gnyawali and Park, Hitt, Ireland Kuratko and Ritala as a source of inspiration to further our understanding on the research topic. Finally, while the most suitable literature is not always easy to get, keywords or search terms directly linked to our research question and goals helped us get a good grasp of what could be relevant (Saunders et al., 2009, p. 76). The use of keywords such as corporate incubators, corporate accelerators, innovation labs, automotive industry, open innovation, strategic entrepreneurship, corporate venturing, cooperation and coopetition therefore helped us find the appropriate literature. Accordingly, these search terms have been used individually or jointly in search for theories related to our topic. In the end, citations from other articles were avoided where possible to act against missing main ideas from the original authors. 3.1.3 Research Philosophy The research philosophy adopted in a research influences the way one views the real world and the evolution of knowledge, underpinning the research strategy and methods employed towards answering what is being investigated (Saunders et al., 2009, p.108;

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Bryman & Bell, 2011, p.18). In accordance to Johnson and Clerk (2006) as well as Saunders et al. (2009, p.108) most important is not which philosophy is superior, but how well the researcher is able to argue and defend the philosophical choices in relation to alternatives that could have been adopted. Saunders et al. (2009, p.108-109) further posit that the suitability of the research philosophy depends on the questions one seeks to answer. Accordingly, we will now discuss the two major research philosophies and how these influenced our reasoning and research process. Ontology Social ontology characterizes the assumptions held about the nature of social reality (Long et al., 2000, p.190; Bryman & Bell, 2011, p.20). The central point in this issue is thereby whether knowledge is viewed as objectively and available to all, or subjectively, as dependent on social actors (Long et al., 2000, p.190). Accordingly, the two key aspects of ontology are; subjectivism and objectivism (Saunders et al., 2009, p. 110; Gray, 2004, p. 17). While objectivism can be elaborated by“ […] social entities [that] exist in reality external to social actors” (Saunders et al., 2009, p. 110), subjectivism represents “[…] social phenomena [that] are created from the perceptions and consequent actions of those social actors concerned with their existence” (Saunders et al., 2009, p. 111). Correspondingly, whereas the objectivist viewpoint sees the social world as to be a concrete network made up of its different components, leaning towards the “pro-natural science approach” of the social world (Long et al., 2000, p. 192), the subjectivism viewpoint and the “anti-natural sciences approach” determine that human realities are divergent and that the knowledge of different realities from social actors cannot be total (Long et al., 2000, p. 192). However, despite the differences between these two viewpoints they should not be held as mutually exclusive, especially in view of the chosen approach possibly varying over time (Long et al., 2000, p. 192). In our case, we adopt a subjectivism viewpoint as our philosophical standpoint in this research and thus assume that reality is influenced by the action and interaction of social actors and is in a constant state of revision. On the contrary, for objectivism, reality is believed to exist independently of social actors (Gray, 2004, p. 17), while positivism is mostly linked to objectivism. As we primarily rely on our interviewees’ perceptions in their role as social actors, we are hereby able to prove that objectivism would be unsuitable for our research. Moreover, our study aims to seek the understanding of coopetitive relationships that exist between CIIAs and their partnering external start-ups. The way we can gather data and knowledge about these relationships will hence be through our empirical study with managers, founders and/or industry experts. As we adopt the subjectivism approach which relies on the social actors to understand reality, we assume that the participants’ perceptions and insights will accordingly help in suitably answering our research questions. Epistemology First of all, epistemology provides a ground for deciding what constitutes acceptable knowledge (Gray, 2004, p.398; Saunders et al., 2009, p.591). According to Audi (1998, p. 1) it “[…] is concerned with how we know what we do, what justifies us in believing what we do, and what standards of evidence we should use in seeking truths about the world and human experience”. Accordingly, it constitutes what is defined as acceptable knowledge in research (Saunders et al., 2009, p. 112). In furthering the understanding of epistemology, Saunders et al. (2011, p. 112-113) therefore suggest the ‘resources’ researcher and the ‘feelings’ researcher. Whereas, resources researchers base the

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collection of data and knowledge on resources, they believe that reality is represented by the objects that are considered as real. On the contrary, the feelings researcher would argue that reality is influenced by the feelings and attitudes of the social actors which have no external reality. Correspondingly, Saunders et al. (2011, p. 113) argue that the resource-researcher embraces a positivist philosophy while the feeling-researcher adopts an interpretivist philosophy. The positivist approach leans towards working in the ways of natural scientist in which reality is determined by rigorous processes of scientific investigation (Gray 2017, p. 39). Realism is hereby another position of epistemology and relates to positivism in the way knowledge is developed (Bryman & Bell, 2011, p. 17). Thus, there are two types of realism; direct realism, which argues that what you see is what you get, and critical realism, defining that the experience is sensational and not the object in itself (Saunders et al., 2011, p. 113-114). In contrast, interpretivism defines that it is not appropriate to use principles and ways of natural sciences to understand the social reality. It is based on the argument that the study of the social world requires a different logic to what is applied to the physical sciences and thereby to understand the differences of humans in their roles as social actors (Bryman & Bell, 2011, p. 17). Researchers adopting interpretivism argue that there are differences between humans in their roles as social actors (Saunders et al., 2011, p. 114). In accordance, the interpretivist approach argues that “natural reality […] and social reality are different and therefore require different kinds of methods” (Gray, 2004, p. 20). Saunders et al. (2009, p. 116) argue that an interpretivist position is especially ideal in the study of business and management research, necessary due to the complexity and uniqueness of the business context. To sum up, while we understand the merits of positivism, our research being more of an explorative study, where we seek for the perspectives of managers and entrepreneurs', we hereby adopt the interpretivist approach and the subjectivism approach for our ontological viewpoint. 3.1.4 Research Approach It is quite significant for one to be clear about the research theory at the beginning, as it clearly influences the design of the research project (Saunders et al., 2009, p. 124). As we seek to explore the relationship that exists between CIIAs and external start-ups and want to determine how coopetition works in these specific relationships, the adoption of an appropriate research approach is critical to get the right answers to our research questions. Accordingly, one can choose between an inductive and a deductive research approach. The deductive approach involves developing a theory, hypothesis and design strategies to test the hypothesis and either accept or refute the claims (Saunders et al., 2009, p. 124; Bryman & Bell, 2011, p. 150). Furthermore, deductive research is a dominant approach to natural sciences, involving a positivist philosophy and an objective view of social reality (Bryman & Bell, 2011, p. 150). Researcher adopting the deductive approach thereby mostly seek to test relationships between variables, as for example, between the level of education and gender in a community (Gray, 2004, p. 25). Appropriately, this involves developing a hypothesis out of theories and utilizing quantitative (or qualitative) data to test the hypothesis for conformity or modify it in regard to new finding (Saunders et al., 2009, p. 125). Deductive approach, by that, stays in contrast to the inductive approach, which involves the exploration of an interaction. On the contrary, the inductive approach moves in the opposite direction of deductive, by beginning with the data collection, then followed by the analysis of the data to build a theory (Saunders et al., 2009, p. 124). Whereas, researchers adopting the inductive approach will rather use

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interviews to get a better understanding of what is being studied instead of using a set of quantitative data for the analysis, this research spurs from the social sciences as it is mainly used to understand the context and how humans interpret their social world (Saunders et al., 2009, p. 126). By reason of considering the context of events, it often uses small samples compared to the large set of quantitative data in the deductive approach (Saunders et al., 2009, p. 124). In consideration of the above arguments portraying the inductive and deductive reasoning, one might be inclined to believe that there are distinctive rigid divisions between the two. Accordingly, wome researchers have the impression that qualitative research is more inclined to induction while quantitative is to the deduction approach (Saunders et al., 2009, p. 124; Morgan, 2007, p. 70). However, Long et al. (2000, p. 195) argue that research tools are not weeded in one set of methodology, whereby problems only happen when one specific approach is used for both theory generation and testing (Long et al., 2000, p. 195). As Morgan (2007, p. 71) puts it; “imagine acting in the real world for as long as 5 minutes while operating in either a strictly theory-driven, deductive mode or a data-driven, inductive mode—I certainly would not want to be on the same road as anyone who had such a fatally limited approach to driving a vehicle!”. Abductive reasoning, additionally, involves moving back and forth between the inductive and deductive logic of reasoning (Morgan, 2007, p. 71; Saunders et al., 2009, p. 127). It starts with creating a rule, making observations and then giving an explanation of what is being observed to provide an answer for the research question (Mantere & Ketokivi, 2013, p. 71). Researcher that employ this approach therefore use the combination of inductive and deductive reasoning by exploring how and why things happen through observations and then convert it to theory through actions (Morgan, 2007, p. 71; Mantere & Ketokivi, 2013, p. 72; Saunders et al., 2009, p. 127). Bryman and Bell (2011, p. 642) further provide a suitable example for the explanation of the process of abductive approach, using the example of the solving of a puzzle. Correspondingly, it involves moving back and forth between the deductive and inductive approaches by setting the hypothesis via the theory, exploring more information by gathering data and seeing how the rule fits the theory, constantly repeating the process until the puzzle is solved. Yet, this open approach does not rely on the confirmation, disconfirmation or generalization but contrarily on the theorization of the observation of surprising facts (Mantere & Ketokivi, 2013, p. 71). In conclusion, in our research, we do not aim to test a theoretical hypothesis by gathering data to confirm or disconfirm nor do we intent to purely use data to build a theory. Accordingly, using a subjective and interpretivist approach to solve our research questions, thus, we adopt the inductive approach. Morgan (2007, p. 72) further argues that no research results will purely follow an inductive or deductive approach, as knowledge is specific, context dependent and can be universally generalized. Our aim is therefore to answer our research questions by making assumptions and then seeking for the entrepreneurs or managers perceptions and experience and combine it with our theoretical framework and logical thinking. 3.1.5 Research Design As already mentioned in the first chapter of this research, we opted for a qualitative research design for this master thesis. Accordingly, it is one of the two main research designs, while a quantitative research design would have been the counterpart (Neuman, 2014, p. 16). Thus, quantitative research being focused on numbers and the testing of theories through a deductive approach, a qualitative approach is mostly based on words, open-ended interview questions and aims at exploring and identifying individuals and

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groups in light of a bigger problem (Creswell, 2013, p. 32). Accordingly, Saunders et al. (2003, p. 146) state that the selection of the research strategy is connected to the three following characteristics: the type of the research questions and goals of the research, the extent of the preliminary knowledge and the time frame as well as the other available resources. The main purpose of our research is therefore, to explore the relationship between CIIAs and their partnering external start-ups, to identify the main motives behind these relationships as well as to understand how they coopete. Therefore, we choose to answer our research questions and reach our research goals through the use of a qualitative research design. Additionally, qualitative research methods are generally characterized by seeking new insight and understanding of what is being studied. Contrariwise, quantitative research methods are described by seeking an overview and explanation of what is studied (Tjora & Torhell, 2012, p. 19). Besides this, Sergi and Hallin (2006, p. 193) explain the qualitative research as being a type of knowledge not aimed to be replicated or generalized but seeking to generate interpretations and meaning. Suitably, we see this as another argument for why our study should be qualitative. Furthermore, the research question(s) that one seeks to answer has an influence on the type of research being conducted. Correspondingly, there are three types of research purposes: descriptive, exploratory and explanatory studies (Saunders et al., 2009, p. 138). Exploratory studies thereby involve the search of literature, conducting focus group interviews and interviewing experts to gain new understandings about a phenomenon (Saunders et al., 2009, p. 140; Gray, 2004, p. 32). As a result of the new data and insights that are projected to emerge in exploratory studies, it is especially advantageous in light of its flexibility and adaptability to change (Saunders et al., 2009, p. 140). It is therefore relevant when one wants to illuminate a problem or find out its nature (Saunders et al., 2009, p. 139). The purpose of a descriptive study, on the other hand, is to provide an account of a phenomenon as it naturally occurs (Gray, 2004, p. 32), whereby also helping to explain one's profile, events and situations (Saunders et al., 2009, p. 140). Thus, for descriptive studies a researcher should have a good picture of the phenomenon being studied before the collection of the data (Saunders et al., 2009, p. 140). Lastly, the explanatory study is used when relationships between variables are been studied (Gray, 2004, p. 32), demonstrated by the example of the correlation between the crime rate and the level of education in a community. To conclude, based on the aforementioned descriptions of the research purposes, it has to be stated that we do not intend to test the relationship between variables as in explanatory studies nor do we intend to describe a phenomenon as it occurs in descriptive study. Appropriately, our study seeks to gain an in-dept knowledge about the relationship that exists between OEMs and their partnering start-ups through their CIIAs’ platform. Additionally, as the topic is new and not widely studied yet, we aim to explore it. Hence, our thesis is mainly an exploratory study since we seek to understand what motivates OEMs to partner with external start-ups and, at the same time, want to gain an understanding of how they coopete in the context of corporate open innovation strategies. 3.2 Practical Methodology In this section, we will discuss the practical methodology of this study. We will first explain the data collection tools adopted as well as the selection process of our respondents. While we then further elaborate on different research techniques, quality criteria, ethical considerations but also the data analysis techniques of our research, also motivating their adoptions.

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3.2.1 Data Collection While the access to data is critical to the answering of the research questions, there are different forms of data, respectively; primary and secondary data. Primary data is thereby the data collected by a researcher for the purpose of the study in question and secondary data is referred to as collected by third parties for some other purposes (Saunders et al., 2009, p. 256; Bryman & Bell, 2011, p. 313). The primary source of data can come from interviewing stakeholders like managers, employees or the general public. Although primary data has the advantage in regard to the collection purpose, secondary data can be considered as an alternative and a source from notable organizations and universities (Bryman & Bell, 2011, p.313). Accordingly, secondary data takes different forms, as for example, documentaries, multiple sources or surveys (Saunders et al., 2009, p. 258-259). In addition, Saunders et al., (2009, p. 268) affirm that secondary data can thereby be easier to access and does not require practical arrangements. Thus, it can save time and resources. These forms of data can be collected through organization’s websites, databases, journals, industry specific statistics and reports as well as organization’s internal surveys. However, both primary and secondary data will therefore be used in our research. Correspondingly, triangulation concerns the use of different methods or sources of data in the same research, to ensure the truthfulness of the gathered information (Gray, 2004, p. 196; Bryman & Bell 2011, p. 397). Therefore, this approach has the advantage of balancing out the weaknesses that the use of the individual methods pose (Gray, 2004, p. 196). In cases were a low response rate is observed, the use of triangulation can hereby be helpful in the validation of the research (Bryman & Bell, 2011, p. 234). In accordance, we intend to use a primary source of data collected through interviews with both CIIAs and their partnering start-ups, and where necessary, also use secondary data sources, mostly resulting from company websites, reports and handbooks to further gain credibility. Furthermore, Creswell (2003, p. 17) expresses that the qualitative data collection can come in the forms of interviews, observations, documents as well as audio-visual data. After reviewing these different forms, we adopt interviews as our main source of data collection, as this will help us to get a better perception of our respondents but also first-hand information. Consequently, interviews come in different forms; structured interview, semi-structured and unstructured interview (Saunders et al., 2009, p. 320; Bryman & Bell, 2011, p. 204), while the choice of the appropriate type is influenced by the question the research seeks to answer, the research design and the research strategy (Saunders et al., 2009, p. 320). First, structured interviews, also referred to as standardized interviews, imply that all respondents receive a similar set of questions, with the aim to be able to aggregate the responses from the different respondents (Bryman & Bell, 2011, p. 202). Additionally, Saunders et al. (2009, p. 320) assert that structured interviews are used when collecting quantifiable data, thus also referred to as ‘quantitative research interviews. Therefore, the findings can be generalized over a population (Bryman & Bell, 2011, p. 202). Second, unstructured interviews are ideal when exploring a general area of interest in detail (Saunders et al., 2009, p. 320). Unlike the structured interviews, the unstructured interviews doe not strictly follow a predetermined list of questions and the respondents are allowed to talk freely, appropriately justifying it being “non-directive" (Saunders et al., 2009, p. 320). Third and lastly, semi-structured interviews are typically referred to as a context in which the interviewer possesses a set of questions, generally structured in themes, which will adapted or changed depending on the interview process (Bryman & Bell, 2011, p. 205; Saunders et al., 2009, p. 320). In this form, the interviewer

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is additionally allowed to ask further questions in relation to the topic, aimed at relevant replies, which will help furthering the understanding of what is being investigated (Bryman & Bell, 2011, p. 205). In conclusion, our primary source of data will come from semi-structured interviews conducted with the CIIAs’ senior-level or operations managers as well as the start-up founders. This will give us the flexibility and possibility to efficiently interact with our respondents and ask further questions relevant to our topic (Bryman & Bell, 2011, p. 205). Oppositely, it also allows the respondents to build on their responses (Saunders et al., 2009, p. 320). To sum up, these are all aspects that the structured and un-structured interview forms do not provide, affecting both the openness of questions as well as the relevance of specific interview parts. 3.2.2 Participants Selection In light of the aforementioned details, we seek to conduct semi-structured interviews with both managers of the corporate IIAs and start-up entrepreneurs in the German automotive industry. However, the access to these target groups has been challenging as a high number of interview requests stayed unanswered or were declined due to time constraints. According to Bryman and Bell (2011, p. 473) the interviewing of managers especially those in the senior positions can indeed be extremely challenging. However, the reason why we chose senior executives and entrepreneurs is because they are involved in the strategic level of these relationships. Accordingly, the use of a purposive sampling approach therefore offers the ability to select respondents that are knowledgeable in regard to the studied topic (Bryman & Bell, 2011, p. 492). Whereas Neuman (2014, p. 121) argue that purposive sampling is ideal in situations where respondents are hard to reach, further advantages can be found in the exploration of topic-related ideas with these knowledgeable respondents (Bryman & Bell, 2011, p. 492). In the selection process of these large companies and start-ups, we considered automotive manufacturers that cooperate with external start-ups through CIIAs. Correspondingly, we searched for the appropriate CIIAs online and then further visited the company's websites to explore their suitability in relation to our research topic. We were first set on an international scope, also contacting companies within and outside Sweden, however, in the end only respondent located in Germany remained. We contacted our respondents through several channels (e.g. contact forms on the website, LinkedIn or email) explaining our research purpose and main aims as well as asking them if they would be interested in collaborating with us through the participation in semi-structured interviews. Positive responses that meet the above criteria were then further followed up and interviews were scheduled. Moreover, a different strategy was employed to reach out to the according start-ups. Accordingly, the contact details of the start-ups were acquired from their partnering CIIAs and therefore, asking for suitable interview partners at the end of each CIIA interview turned out to be the most efficient way to conduct the start-up interviews. Howbeit, non-probability sampling or non-random sampling unlike the statistical random sampling provide the flexibility to select samples based on the researcher’s subjective judgement (Saunders et al., 2009, p. 233). Through this approach, we were able to reach three start-ups, and by them having collaborated with our interviewed CIIAs, we also ensured to bring in new perspectives into the individual and specific relationships between these start-ups and their according CIIA.

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At the end, Saunders et al. (2009, p. 156) support that the researchers should beware of the possible interviewee and sampling biases in their research as these may distort getting reliable data. Reciprocally, we are aware of the sampling and interviewee bias that may arise especially in light of our second participants selection approach. However, all the start-ups that we interviewed were very open in their discussions about their relationship with the CIIAs and also constantly demonstrated the willingness and confidence to share the relevant information with us. In addition, the research questions, objectives and the choice of the research strategy in businesses and management research may also influence or dictate the non-probability sampling (Saunders et al., 2009, p. 233). Accordingly, there are no set rules about the number of sampling that can be used, which clearly induces ambiguity. Finally, unlike quantitative data, connected with the issue of numbers, the access to data that provide in-depth information is critical in qualitative research (Bryman & Bell, 2011, p. 489). Researchers therefore suggest that additional interviews should be conducted until the data saturation is reached, meaning that further interviews should be conducted up until the additional data collected provides less or no new insights anymore (Saunders et al., 2009, p. 235). Most important in qualitative research is therefore not the minimum or maximum number of samples but the insights provided by the respondents. 3.2.3 Interview Guide In semi-structured interviews, issues of data quality as, for example, with reliability, the forms of bias, validity and generalizability may be encountered (Saunders et al., 2009, p. 326). However, qualitative research attempts to explore complex and dynamic circumstances and therefore the replication of findings would be unrealistic, particularly as conditions change over time (Saunders et al., 2009, p. 326). While the successful preparation of an interview requires good planning defining the quality of the data collection, we used interview themes to effectively structure and delimit the key questions and aspects in our interview guides (see Appendix 1 and 2). Appropriately, interview themes are relevant to properly define the focus of an interview and especially help when it comes to the asking of relevant questions (Bryman & Bell, 2011, p. 473; Saunders et al., 2009, p. 328). The interview guides were thereby tailored to the different respondent categories, whereas the interview context and the time availability of our participants considerably guided our interview process. However, we were especially careful and made sure that the main questions and themes were all captured in the different interview guides. Kind (2004, p. 17) argues that flexibility is one key factor in conducting a successful qualitative interview, in which a list of fairly formal questions is used and the sequence of usage from respondent to respondent may vary. An advantage of the semi-structured interview combined with an interview guide is thereby the flexibility that is given to the interviewee in answering the questions, the interviewer being able to clarify by asking follow up questions (Kind 2004, p. 17; Bryman & Bell, 2011, p. 467; Saunders et al., 2009, p. 338). In the end, we formulated open-ended questions that allowed the interviewees to answer the questions freely without leading them to a specific direction, ensuring neutrality (Saunders et al., 2012, p.393). As previously mentioned, we designed two interview guides; one created especially for the CIIAs (see Appendix 1) and the other one intended for their collaborating external start-ups (see Appendix 2). Both interview guides were therefore needed to illustrate but also connect both parties’ perceptions of the relationship. The different themes and their respective aims were derived based on our theoretical framework with the absolute intention to answer our two research questions. Correspondingly, we structured the interview guides in 5 themes: 1. Role and Relationship to the Research Topic; 2.

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Company Details; 3. Selection Process and Collaboration Methods; 4. The Relationship between CIIAs and External Start-ups and 5. Competitional Tensions and a Coopeting Relationship. The first part was therefore aimed at understanding the role and relationship of the respondents to our research topic. This helped us to gauge the respondents’ knowledge suitability in relation to our research topic and simultaneously would increase the credibility of our empirical findings and our research in general. The second part included gaining more information about the two parties engaged in the relationship, respectively the CIIAs and the external start-ups, to be able to define CIIAs and their key aspects as well as present the first key motives of their relationship. Accordingly, this was also a section that would highly support the familiarization with the data in the specific data analysis phase (see 3.2.7.). In the third part of the interview guides, the internal mechanisms of CIIAs, main aspects of the relationship between CIIAs and external start-ups as well as the general management of this relationship were to be highlighted. And finally, while part four’s intention was to elaborate on the key drivers of the relationship, the fifth section illustrated the implications of these relationships and established the existence of coopetition (see Appendix 1 and 2). 3.2.4 The Interview Process In light of the interview process, we conducted six interviews. Whereas, three were conducted with CIIAs and the other three were with start-ups. Accordingly, two start-ups out of the three were collaborating with the same CIIAs, while for the third CIIA we were, unfortunately, not able to reach any of its collaborating start-ups. However, all the interviews were carried out within a time frame of four weeks, while the majority of them were conducted during the week. In accordance with Saunders et al. (2009, p. 195), a researcher should thereby avoid the scheduling of a telephone interview at unreasonable times of the day. Exceptionally and to suit the availability of the interviewees, only two of the interviews were therefore conducted during the weekend. Additionally, while most non-standardised interviews are done face-to-face (Saunders et al., 2009, p. 348-349), Bryman and Bell (2011, p. 208) further argue that through a telephone interview the researcher may lose the opportunity to witness the non-verbal behaviours of the participants. However, other methods might be employed as well (Saunders et al., 2009, p. 348-349) And more specially in instances were access, funding and location are a challenge (Bryman & Bell, 2011, p. 489), Saunders et al. (2009, p. 348-349) assert that qualitative interviews could be conducted via telephone or electronically via the internet. Correspondingly, it provides the advantage of speed in the data collection, low costs and an easy access to respondents (Saunders et al., 2009, p. 349). Due mostly to time, capital and geographical constraints our interviews were therefore carried out either via Telephone, Skype or WhatsApp. While making sure that all unspoken and other relevant behavioural aspects of the participants that could affect the meaning and significance of our empirical data were noted, the advantage of speed and easy access were therefore appropriately exploited. Moreover, flexibility is a critical issue in conducting a successful qualitative interview (Kind, 2004, p. 17). In the interview process, we hence used our interview guide as the prevailing structure, helping us to avoid that important questions would be missed or only partly answered. However, the time spend with each question, as well as the follow up questions asked varied from interview to interview. Additionally, we sent out the interview guides to all respondents prior to the interview to give them the chance to familiarize themselves with the questions as well as the possibility to provide more detailed and concise answers. Nonetheless, at the beginning of all the interviews we

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introduced ourselves, our research topic as well as gave the respondents a broad overview of the structure and the timing of the interview, to ensure that we were all on the same page. Thus, Saunders et al. (2009, p. 349) claim that establishing trust is particularly important when asking sensitive questions and even more so when conducting a telephone interview. In addition, King (2009, p. 17) assert that starting with an easy question that the interviewee can answer, creates the opportunity for the interviewee to feel relaxed and therefore characterizes a good and trustful introduction into the interview. Respectively, we started by asking them about their roles and responsibilities inside their companies, which is clearly a question every respondent knew how to answer and felt comfortable starting with. Besides, we ensured that all the questions were formulated in an understandable und concise way, avoiding the presence of multiple questions to reduce the risk of partial responses. Whereas, ending the interview in a similar fashion for all of our interviewees; by thanking them for their time and insights and giving them the opportunity to share some supplementary thoughts with us, we also included the possibility for the interviewees’ to review our interview manuscript after the successful transcription of the interview, further ensuring the credibility of the our research through the acquiring of our respondents’ validation. To conclude, permission should be sought prior to the recording of an interview (Kind, 2004, p. 17; Saunders et al., 2009, p. 341). King and Horrocks (2010, p. 45) explain that the respondents could be suspicious about been recorded, whereby the emphasis on confidentiality and the detailed explanation about the usage of the recorded data gains in outmost importance. In accordance, we requested for the permission to record at the beginning of each interview highlighting to our interviewees that we are aware of the confidentiality and privacy considerations and that we would, accordingly, act in the appropriate manner. However, all our respondent quickly agreed to be recorded. Thus, audio-recording provides the advantage for the interviewer to concentrate on the questioning and listening to responses and the chance for accurate recording of the interview (Daymon & Holloway, 2002, p. 179). Finally, Saunders et al. (2009, p. 339) also affirm that it is important to keep interviewees identity confidential as this will increase trust and allow them to more willingly participate. Accordingly, while assuring trust throughout the interviews, the aspects of confidentiality and anonymity can be further enlarged by being also guaranteed outside of the interview process boundaries (see 4.1). 3.2.5 Quality Criteria The quality of a research is central to producing knowledge that can be trusted as a valuable contribution to theory. Therefore, demonstrating that the knowledge contribution is of good quality is vital. According to Bryman and Bell (2011, p. 394) reliability and validity are essential criteria for establishing and assessing the quality of quantitative research. Whereas, reliability is most suitable for quantitative research (Gray, 2004, p. 342), validity focuses on whether the research approaches used can be directly connected to the research purpose and problem or seen as a dimension of them (Daymon & Holloway, 2002, p. 90). It is “concerned with the integrity of the conclusions that are generated from a piece of research” (Bryman & Bell 2011, p. 394). However, the relevance of these criteria's in qualitative research is been discussed among qualitative researchers, even ones that have considered its relevance has suggested for the terms to be altered. (Bryman & Bell, 2011, p. 394).

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In qualitative research the context under which the research is conducted may have an influence on the findings, other criteria have to be used to guarantee the quality of the research (Gray, 2004, p. 345). Neuman (2004, p. 119) further argue that the conditions under which studies are conducted are not stable overtime as the interaction developing between researcher and the subject. Therefore, some qualitative researchers propose, studies produced guided by the interpretivism approach be evaluated using different criteria than used in quantitative research (Bryman & Bell, 2011, p. 43). Gray (2004, p. 345) posits that qualitative research can be assessed by criteria the of trustworthiness. Which is focused on in the aspects; Transferability, Credibility, Dependability and Confirmability (Bryman & Bell, 2011, p. 43; Daymon & Holloway, 2002, p. 90). Authenticity is another criterion used for evaluation of qualitative research (Gray, 2004, p. 345). As our research is based on qualitative research where the perspective of our respondents is used in our findings, we adopt the above criteria for evaluating the quality of our research. Below we elaborate how the quality of our research has been supported. Transferability is concerning with whether the research results can be extended to a wider context or accordingly, a different social setting (Bryman & Bell, 2011, p. 43; Daymon & Holloway, 2002, p. 94). Gray (2004, p. 345) considers the data collected to be used when comparing two contexts for similarities and giving good judgements between the two. However, generalizability can hardly be seen as an advantage when it comes to the qualitative research methods (Firestone, 1993, p. 16). The argument is that, when research is been generalized, the findings cannot be strongly proven to be applicable in a different phenomenon. Qualitative research conducted based on semi-structured interviews could pose some concerns over the generalizability of the findings. Especially, when based on small samples within a specific social setting at a specific point in time, or respectively not describable of the entire community (Falk & Guenther, 2006, p. 2; Saunders et al., 2009, p. 335). Therefore, statistical generalizability of research findings in not a strength in qualitative research as it is in quantitative research. However, Bryman and Bell (2011, p. 398) suggest that a detailed description of the account of data (database) and the context under which the study is conducted. In order to help others to be able to make their own judgement whether there is a possibility of transferability of findings to another context. Yin (2003, p. 38) argues that in qualitative research one can make a generalization of the results to theory as how natural sciences make generalization of finding to the population. As our research was based on exploratory study, and based on the above arguments, we do not intend to transfer our findings to the whole population but to theory. Our research finding is aimed at contributing to the already existing theory of coopetition through our proposed conceptual framework. Credibility involved whether the data or findings presented can be trusted and the researcher has made good efforts to present its finding truthfully (Bryman & Bell, 2011, p. 396). They further argue that the credibility of the account that the researcher arrives at that is going to determine if it will be accepted by others. Gray (2004, p. 345) propose that this can be attained through the use of persistent observation, triangulation or member check. Where triangulation involve the use of multiple source of data, methods or theories to prove the credibility of the data. Member check which Bryman and Bell (2011, p. 396) referred to as “respondent validation” involves presenting the research finding to the subjects for confirmation that the respondents have not been misinterpreted. In our research we ensured credibility through our semi-structured interview and used the

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probing question for more clarification on the questions. We also used respondent validation by provided the data collected from our interviews to our interviewees for review to ensure that we did not misunderstood them in what they say. Dependability replaces the idea of reliability as in quantitative research which involves the achieving of similar results when the data set is been provided to an independent research to draw conclusion (Bryman & Bell, 2011, p. 398). Gray (2004, p. 345) assumes that this can be attained through the use of audit trails through the data. Which entails making a complete account of all the records from problem formulation, selection of participants, transcriptions, data analysis are all made available (Bryman & Bell, 2011, p. 398; Daymon & Holloway, 2002, p. 94). This mean if the data is been used by auditors, they would be able to establish if correct procedures are been followed. We followed the above recommendation by keeping a complete set of all the documentation of all relevant gathered (the interview guide, transcribed data, recording, participants information and data analysis) throughout our research in a shared drive to ensure security and availability upon request. Confirmability is hard to attain in quality research (Bryman & Bell, 2011, p. 398). It involves showing the reader that the information presented is not influenced or altered by the researcher. Thus, there should be connection between data and the interpretation of the researcher (Gray, 2004, p. 345) to show the researcher has acted in good practice (Bryman & Bell, 2011, p. 398). They further state that it should be clear that the researcher personal values and or theoretical disposition has not influenced the conduct of the research. In an effort to avoid misleading our respondents in anyway, we used open ended questions followed by probing questions to avoid the manipulation of our respondents. Additionally, we made sure that our personal values, opinion or prior knowledge about the topic has not mislead the research findings by not using our own personal view and we ensured using information that we deem important in the best objective manner. According to Gray, (2004, p. 345) authenticity which is tightly linked to credibility “relates analysis and interpretation to the meanings and experiences that are lived and perceived by the subjects of the research” (Gray, 2004, p. 345). It involves fairly reporting the data in complete as they were presented by the respondents and in addition to be aware of any multiple voices and emotions of respondents conflicting with realities within it (Gray, 2004, p. 345; Neuman, 2004, p. 116). In meeting authenticity readers should be able to understand the substance of the experience through the quotation of respondents (Cope, 2014, p. 89). In our study we tried to capture the perception of all senior executives in CIIAs and Star-ups that we interviewed in answering our research questions by using perceptions from all our respondents. 3.2.6 Ethical Considerations The behaviour of a researcher towards people that are subject of a study or any person that may be affected by the research is referred to as ethics of research (Saunders et al., 2009, p. 183). Social research involving people could be a complex and challenging responsibility (King & Horrocks, 2010, p. 103). They further argue that throughout the process from the beginning to the completion of the research ethical issue are likely to arise. Therefore, throughout the research process ethical considerations should be observed to ensure the research is designed methodologically sound and morally defensible by all involved (Saunders et al., 2009, p. 183; King & Horrocks, 2010, p. 103). Paying less attention to research ethics may render a good potential research to be

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challenging and difficult to implement which may result in the failure of the research (Saunders et al., 2009, p. 168). Research ethics was placed in the heart of our actions during the entire process. General ethical consideration including the Umeå University code of ethics in the thesis manual are followed throughout our research to ensure our research is conducted in sound and appropriate manner as discussed below. Any research that pose potential harm to subjects in the study by any mean could be considered inappropriate. Bryman and Bell (2011, p. 128) assert that harm could come in different forms from; "physical harm; harm to participants’ development or self-esteem; stress; harm to career prospects or future employment; and ‘inducing subjects to perform reprehensible acts”. However, Bell and Bryman (2007, p. 68) argue that in management research there is more likely to wrongdoing than harm to participants as it is in biomedical sciences. Wrong doing as they refer to Immanuel Kant’s idea that it involves unconditionally protecting the rights, humanity and the dignity of others. As we are investigating the relationship between corporate incubators and their partnering start-up, we are aware of the sensitivity of our research for information that we gather from this to avoid falling in the wrong hands. In avoiding harm or wrong doing to our participants', we clearly explained to them what we intent to look at is, how they cooperate and motives behinds these relationships and if there are any competitional tension inherent in the relationships. This was aimed to make our intentions clear and give them the chance to make their own decision. Informed consent is not a straight forward process to attain from research subjects (Saunders et al., 2009, p. 190). Research participants should be given as much information as possible to allow them to make an unconditional decision to participate or not (Bryman & Bell, 2011, p. 133). However, Saunders et al. (2009, p. 190) argue that agreeing to participate in data collection does not mean consent to how the data is going to be used. Therefore, explanation should be provided to research participants for the purpose and the nature of the research to allow them to freely decide whether to participate or not (Bryman & Bell, 2011, p. 133). In our introductory letter to participants and also in our interview we explained to them that our goal is to understand their relations and any date collected will be purposely used for research purpose only. We provided them with our interview guide and the estimated timing for the interviews. Invasion of privacy is very much linked to informed consent, confidentiality and anonymity (Bryman & Bell, 2011, p. 136). In providing information to participant for informed consent, information about protecting of participant privacy could be included but, nonetheless participants could reserve not answering any question that may invade their privacy (Bryman & Bell, 2011, p. 136; Saunders et al., 2009, p. 194). To avoid any harm or invasion of privacy, participants' information should be treated with confidentiality and anonymity (Bell & Bryman, 2007, p. 69). All information collected from participants are protected and would not be shared by any means to third parties. Individuals and company's identity are coded to avoid the identification of the described subjects. Some of our participants requested for their identity to be keep private and we promised them to do the same and that their names or company names will not be mentioned in anyway. Bryman and Bell (2011, p. 136-137) assert that deception occurs when a researcher represents its research other than its intended purpose. This could be in instances when the research data is used to give competitive advantage to one company over the other

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(Saunders et al., 2009, p. 190). They further posit that such acts may pose harm or embarrassment to the employees providing such information and to the researcher as well. We ensured honesty in all our data collection and research objective and avoided using any lies or misleading information. The objective of our research will not be changed by any means for other purposes. 3.2.7 Data Analysis As we aim to conduct interviews with managers and entrepreneurs in the automotive industry, we used qualitative data. Qualitative unlike quantitative data, generally is in the form of unstructured textual material and uncomplicated to analyse (Bryman & Bell, 2011, p. 571). This represents non-numeric data that has not yet been measured and can be collected through different research strategies (Saunders et al., 2009, p. 258-259). Thus, unlike quantitative data there are no clear rules in the analysis of qualitative data (Bryman & Bell, 2011, p. 571). The most commonly cited approaches for the data analysis are therefore grounded theory, thematic analysis and analytic induction (Bryman & Bell, 2011, p. 571; Braun & Clarke, 2006, p. 79). Analytic induction is a method that involves formulating a tentative research question, explaining a hypothesis concerning the question and further proceeding to the collection of data for analysis (Bryman & Bell, 2011, p. 574). Accordingly, this process continues to redefine or reformulate the hypothesis until the achievement of conformity (Bryman & Bell, 2011, p. 574). Contrariwise, grounded theory involves the use of defined procedures to build an explanation or develop a theory from the core themes that emerge from the data (Saunders et al., 2009, p. 509). The gailure to follow the procedures outlined may thereby result in developing a report that is not detailed enough to suitably explain the theory build (Saunders et al., 2009, p. 509). In our research we do not aim to test a hypothesis by using the analytic induction approach nor do we aim to build a theory by following a set of guidelines as portrayed in the grounded theory. Most relevantly, the thematic analysis is a method concerned with “identifying, analysing and reporting patterns […] within data” (Braun & Clarke, 2006, p. 79) and has the advantage of being flexible, easy and uncomplicated to learn, permitting its application in different theories, and providing understandable results and elaborated data sets, which can, however, be a little complex (Braun & Clarke, 2006, p. 78-79; Bryman & Bell, 2011, p. 572). Based on the advantages and flexibility provided by the thematic analysis, we therefore adopt the thematic analysis as our analysis technique. Correspondingly, Braun and Clarke (2006, p. 87) provide a six-step guide concerned with the process of the thematic analysis (Table 7). Table 7: Phases of the Thematic Analysis (Braun & Clarke, 2006, p. 87)

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However, these steps should not be seen as pre-set rules or followed linearly, as it should involve moving back and forth between the different phases when needed (Braun & Clarke, 2006, p. 86). Additionally, the different phases are not all applicable to only the thematic approach and some phases are even similar to the phases of other qualitative analysis. Appropriately, we will see these six steps as guiding steps in the analysis of our own data. The first phase, a very time-consuming phase, involves the transcription of verbal data which entails thoroughly reading the data set to familiarize yourself with it, and at the same time, looking for meaning and patterns (Braun & Clarke, 2006, p. 87). Accordingly, taking notes and writing down ideas for the subsequent phases is crucial. The second phase can be characterized by the production of initial codes based on the relevant and purposeful ideas already pointed out in the first phase. This happens mostly using basic sets of the raw data (Boyatzis, 1998, p. 63). The third phase comprises developing themes from the different codes generated from the entire data set. The sorting of the codes and analysing how they can be allocated to form themes. Visual representation with the use of tables, models or mind-maps to sort the codes to different themes may be helpful in this phase (Braun & Clarke, 2006, p. 89; Yin, 2011, p. 181). The fourth phase requires the reviewing and adjusting of themes already set up in the third stage, where some themes can be consolidated, and some separated to new themes. In this process, a continuous refinement and re-coding is required until satisfactory themes are attained but the avoidance of endless re-coding should be respected (Braun & Clarke, 2006, p. 92). The fifth phase and the sixth phases are the final phases and involve the analysis of the data and presentation of the report. For the fifth phase, after reaching satisfactory thematic maps, themes are sorted to understand what each theme entails. Accordingly, this means trying to make sense out of the data in the themes to identify what is interesting in them and why. However, a balance in the analysis of the data, especially in regard of the different themes is important, to avoid an increased focus on some over the others (Braun & Clarke, 2006, p. 92). The sixth and final phase covers the final analysis and reporting of findings. The aim of this phase is to unload the data and present it in an efficient. The data should therefore be presented in an understandable and non-recurrent way, aiming at convincing the reader of the validity of the analysis by developing arguments in relation to the research questions and general storyline of the research (Braun & Clarke, 2006, p. 93-94). As a result, we started our data analysis by transcribing all interviews using a software called InqScribe. According to Garde (2012, p. 175) InqScribe has the advantage to be easy to use but is also compatible with all kinds of different media files formats as, for example, MP3, audio files and MPEG (Garde, 2012, p. 177). In light of the importance of flexibility and outmost accuracy of the transcription, the possibility to upload the audio files and listen to them using different speeds but also being able to type the text on the same interface, further justified our choice for InqScribe. After the transcription we therefore verified that all important information was captured in the interview manuscripts by listing to audio files twice again. Additionally, the final reading of the transcribed text concluded the data processing step. The next steps involved manually putting all the relevant data segments into two excel files, following the interview guide structure, to be able to highlight relevant data features and generate initial codes for the CIIAs and start-ups separately. This correspondingly helped us to gain a better understanding of the all the different insights available and was especially necessary to recognize similar subthemes between CIIAs and external start-ups, with the aim to group them into the main themes in the final coding excel file later on (see Appendix 3).

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Accordingly, and after constant review of the interrelation between the entire data set, the initial codes and the subthemes and main themes, we came up with the following four main themes: 1. CIIAs’ Proof of Existence; 2. The CIIA and external Start-up Relationship; 3. The Key Motives driving the Start-up and CIIA Relationship and 4. Coopetition between CIIAs and External Start-ups. These are, together with their respective subthemes, illustrated in the figure below (Figure 10). Finally, Chapter 5 will represent the sixth and final phase of this thematic analysis concerned with the creation of the aforementioned summarizing and concluding discussion, interconnecting the research questions and purpose of this master thesis with our theoretical framework and empirical findings.

Figure 10: Illustration of Themes and Subthemes

CIIA's Proof of Existence

The CIIA and External Start-up

Relationship

CIIA's Organizational

Context

Partner Selection

Collaboration between CIIAs and External

Start-ups

The Key Motives driving the Start-up & CIIA Relationship

Access

Organizational Learning

Competitive Advantages

Growth

Co-Creation and Co-Development

Network

Proof of Concept

Funding and Ownership

Long-Term Collaboration

Reputation and Recognition

Coopetition between CIIAs and

Start-ups

Challenges and Risks

The Balance Between the Sharing and

Protection of Resources

Trust

Opportunism

Possible Competitional

Tensions between CIIAs and External

Start-ups

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4 Empirical Findings In this section, we aim to present the empirical findings based on the interviews we conducted with the CIIAs and their partnering external start-ups. Following the thematic analysis by Braun and Clerk (2006), we will first introduce some interview details in light of the familiarization with the data. The findings will then be presented according to our previously elaborated theoretical framework and methodologies with the aim to answer our research questions.

4.1 The CIIAs Background and Area of Competence According to Braun and Clerk (2006, p. 87) the first stage in the thematic analysis consists in the familiarization with the collected data. This happens by transcribing the data and going over it in detail to filter out the main ideas and thoughts relevant to answer the research question. Accordingly, we transcribed the six conducted interviews and will present herein the background and areas of expertise of our interview respondents. The first part of our interview guideline focused on the company details as well as the respondent's knowledge and expertise in relation to our research topic. This therefore helped us in determining, if they would qualify as suitable respondents in the light of our thematic analysis. Bell and Bryman (2007, p. 69) further state that to avoid any harm or invasion of privacy, participants' information should be treated with confidentiality and anonymity. Correspondingly, as most of our respondents requested to stay anonymous, we decided, to ensure conformity, and to provide all our respondents with anonymity. Therefore, henceforth in the presentation of the results, the CIIAs and start-ups will be referred to as per their assigned coding. Following, we will present all details regarding the dates and the duration of the interviews, the assigned codes, the used interview modes as well as the interviewees positions inside their organizations (Table 8). Table 8: Overview of the Interviewed CIIAs and Start-ups

Date Codes Positions Interviews Modes Duration

2019-04-15 CIIA 1 Program Coordinator Telephone 00:56:12

2019-04-11 CIIA 2 Program Operations & Open Innovation Skype 00:46:38

2019-05-07 CIIA 3 Head of Unit Telephone 00:29:30

2019-04-19 Start-up 1 Product Development & Project Manager

Skype 00:40:11

2019-04-30 Start-up 2 Co-Founder & General Manager Telephone 00:48:29

2019-05-11 Start-up 3 Co-Founder & CEO Skype 00:57:13

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4.1.1 CIIA 1 CIIA 1 is a sub-unit of one of the factories of a large automotive manufacturer in Germany. The factory has over 400 employees and is working closely together with other business units of the parent OEM. The CIIA is part of the new strategy, described as a complete strategic shift from 100% combustion engine cars to fully electric cars. Moreover, the advocate department is called e-mobility and innovation, responsible for all digital and human robotics topics for the next generation of electric cars of the OEM. Accordingly, we interviewed the program coordinator who is responsible for the daily business, the organization of events and the scouting of start-ups as well as all the overall operations. The interviewee has been working at the CIIA since its inception in 2017. Therefore, this respondent is well experienced and appropriately involved in the CIIAs’ overall activities. 4.1.2 CIIA 2 CIIA 2 can be considered as a unit of a large automotive OEM in Germany. The OEM is employing over 300, 000 around the world and the CIIA can be related to a team called Open Innovation. This team is therefore responsible for introducing external innovations to the OEMs’ internal business unit and departments. In addition, the CIIA can also be defined by its proximity to a collaboration and acceleration platform, providing the setting for the cooperation with external start-ups. This platform gives the start-ups with the possibility to present their technologies and solutions. Respectively, we interviewed the responsible for the program operations, being an active member of the open innovation team for the duration of nine months. However, the CIIA being a small unit the interviewee had the chance to gain a high amount of knowledge in regard of the CIIAs’ overall activities since the start of the employment. The interviewees responsibility mostly concerns the scouting of external start-ups that showcase interesting, valuable and suitable high-potential technologies and the matchmaking with the corporation’s internal business unit lacking resources and competences in those areas. Finally, we believe that the respondent therefore has the appropriate amount of knowledge required for our empirical study. 4.1.3 CIIA 3 CIIA 3 corresponds to a department, founded three years ago, directly related to a sub organization of a large automotive company in Germany. This sub organization is therefore specialized in the IT sector. The department’s responsibilities can be divided into two main categories, respectively; the creative unit, supporting different units within the firm from human resources, sales, production as well as digitization and transformation to boost internal innovations, and the start-up unit, responsible for bringing in external innovations through the collaboration with start-ups. Appropriately, we interviewed the head of the department. As the pioneer of the unit, we trust that this interviewee has enough experience and insights in helping to answer our research questions. However, and unfortunately, for this CIIA we were not able to interview any of its partnering external start-ups despite of different attempts. 4.1.4 Start-up 1 Start-up 1 is a start-up, partnering with the CIIA 1, and located in Germany. The start-up is active in the field of e-mobility and more specifically is concerned with charging station infrastructures and advertisement, targeting customers through a specific bonus or reward system. Correspondingly, we interviewed the responsible for product development and project management of the start-up. The interviewee was completely involved and

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constantly present when it comes to the collaboration with the CIIA 1, thereby demonstrating a solid knowledge base in all key aspects regarding the partnership with CIIA. 4.1.5 Start-up 2 Start-up 2 was engaged in a collaboration with the CIIA 2 and is also located in Germany. The star-ups’ expertise lies in the field of IoT devices, offering solutions to third party developers for the better integration of IoT applications in regard to the connectivity and communication of the different IoT technologies. Their specialization in the automotive industry thereby concerns the automatization and the interconnection of devices. Accordingly, we interviewed the COO of the start-up, simultaneously being one of the founders and general managers of the organization. While mainly responsible for HR, project management and finance, the interviewee showed an extremely appropriate level of knowledge in regard to the start-up itself as well as the collaboration with CIIA. Thus, we trust that the insights were suitable and valuable to our research. 4.1.6 Start-up 3 Start-up 3 is also involved in a collaboration with CIIA 2 and located in Germany. Whereas this start-up situates itself in the industry 4.0 sector, its offerings involves a hardware centre network and the according software that can be used inside of factories and more specifically warehouses. The proposed services therefore aim at the localization of mobile robots, vehicles, goods and people as well as the general optimisation of fleet management processes. Correspondingly, we interviewed one of the co-founders and CEO of the start-up, mainly responsible for the coordination of the overall start-up activities. Similarly, to the start-up 2, the interviewee was highly knowledgeable when it comes to the general operations of the start-up as well as the relationship to the CIIA. 4.2 CIIAs’ Proof of Existence With respect to our theoretical background, and accordingly our conceptual framework, it was especially important in the first place to prove the existence of significant overlaps and interplays between the different corporate open innovation strategies (CIs, CAs and CILs), ultimately taking the form of a CIIA. Correspondingly, all three CIIAs, did not want to define themselves with only one of these strategies, and for CIIA 1 and 2 the unification of all three of these streams was stated and described.

“A little bit of each of these types” (CIIA 1)

“I would say we have aspects of all of them” (CIIA 2) CIIA 3, however described their individual approach as follows; “We specifically did not want to name us as incubator or accelerator. We believe that

we have a better system, not to do it like an incubator or accelerator” (CIIA 3)

Hence, this emphasizes the fact of a missing universal terminology, leading to the argument that incubators or accelerators are not efficient or good enough by themselves.

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4.3 The CIIA and external Start-up Relationship 4.3.1 CIIA’s Organizational Context To be able to better analyse and understand the prevailing relationship between the external start-ups and the CIIA, the organizational setting, and therefore the environment in which the interplay between these players takes place has to be further defined. New Concept Features The CIIA 1 and CIIA 3, being founded respectively 2 and 3 years ago, can be described as newly emerged. Additionally, the broad scope of the program coordinators tasks and responsibilities as well as the fact that CIIA 1 is a part of the new corporate strategy, after a complete strategic shift; “So, the whole factory was standing still and transformed to the new strategy […], it is a completely 100% strategic shift from 100% combustion engine cars, very heavy, very,

very big cars, to smaller cars, fully electric.” (CIIA 1) emphasize this newness and smallness. Respectively; “We are too small to change anything, but we partner with other departments and that

is working very well.” (CIIA 1)

Relationship to the Parent OEMs All CIIAs are closely related to their parent OEM and extremely dependent on the collaborations with internal business units. Therefore, they cannot be considered as independent business entities. However, a difference in the organizational culture separates them from the core organization’s structure and processes. CIIA 1 CIIA 1 is fully owned by a daughter company of the OEM. Even if feeling independent because of its size; “[…] we feel more independent than the others, because we are […] smaller” (CIIA 1) CIIA 1 is part of a department called e-mobility and innovations and collaborates actively with other OEM entities (e.g. innovation labs or other internal departments). This CIIA has no R&D department as well as no standard documentation processes for the projects in place. CIIA 2 CIIA 2 cannot be considered as an own legal entity, as it is part of the R&D department of the OEM.

“Yes, absolutely. It is not an own or individual […] legal entity” (CIIA 2)

This CIIA is in direct contact with the internal business units and provides them with the right start-ups for the units’ projects, after a thorough scouting process designed according to their demands. The owning OEM of the CIIA 2 is in the process of becoming more flexible and agile through a cultural change program, while CIIA 2 states that it already is. Yet, the general processes are still slow and the decision-making hierarchical.

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“Therefore, we are very flexible and agile but that does not yet apply to the whole organization. We are on the way. […] It is quite a long process and we are on a good

way, but we are not there yet.” (CIIA 2) CIIA 3 CIIA 3 belongs to an internal department of its corresponding OEM. Similarly to the CIIA 2’s approach, the department actively engages with the internal business units.

“[…] therefore we support all different departments from HR to sales, to production and so on, in questions of digitalization and transformation” (CIIA 3)

Organizational Environment When it comes to the organizational environment, the organizational culture, the structure of the CIIA, the staff’s expertise and qualifications as well as the available project partners or sponsors determine the key aspects. In regard to the organizational culture CIIA 1 and 2 are both established based on an open innovation strategy and either frequently use as well as test out new innovative methods or are oriented towards the discovery of future topics, technologies and opportunities.

“[…] we are trying to use these innovative methods in our daily business” (CIIA 1) Accordingly, start-up 3 describes it as an innovation environment with a high motivation towards change. The start-up 2, however, states that the participants have to join these closed environments first, before being able to profit from the open innovation setting.

“[F]or me personally, it is super open, but you need to join this club or the circle to get

in this open innovative space.” (Start-up 2) Both extremely flexible, and for CIIA 2 also agile, the constant adaptability of the whole program, and the broad scope or openness when it comes to their sector of activity are part of the ordinary activities for CIIAs. In addition, for CIIA1 standardized processes are missing and control mechanisms are not relevant.

“And we do not have a standardized documentation of the project.” (CIIA 1) When it comes to the organizational structure, CIIA 2 can be seen as a multiplayer platform, existing through the collaboration with other OEMs or partnering large corporations. It is therefore a collaborative open platform, where start-ups can get access to numerous potential clients as well as other useful contacts. CIIA 1 on the other hand, defines itself as a gate-keeper between the start-up and innovation ecosystems within the OEM.

“[W]e are kind of a gate keeper for start-ups to the whole start-up network and innovation network” (CIIA 1)

Additionally, possible project partners and sponsors could be other large corporations, cities, independent partners (e.g. accelerators), R&D departments, digital and data labs within the OEM group, logistic partners, external collaboration partners (e.g. start-ups,

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academic partners, students, external developers), large venture capitalists or a partner incubator. As CIIA 2 explains; “[W]e want to identify the best cooperation partners and work with them […] no matter

what background they have.” (CIIA 2)

Finally, in accordance with the expertise of the team in regard to the CIIA concept, CIIA 1 affirms; “Nobody of us is a real expert”. However, in the field of innovation the program coordinator sees himself as an expert. For the interviewee of CIIA 2, especially being a new team member, the expertise in this regard is not yet alive.

“But then, when we have selected the start-ups regarding these criteria, we hand the long list to our business units, because anything regarding technology, application to

our products and processes, ability of solving the use cases with us, we are not the experts for that.”(CIIA 2)

Accordingly, the technical expertise lies with the business units, together with all the other knowledge related with the technology, the applicability to the OEMs’ products and processes as well as the ability of the start-up to find the adequate solution. 4.3.2 Partner Selection This section includes elaborations regarding the corporate fit, the selection tools and methods as well as the selection criteria of CIIAs and their partnering start-ups. This section will thereby help us identify the important characteristics CIIAs and external start-ups are looking for but also highlight some preliminary key aspects relevant for the analysis of their relationship. Corporate Fit While CIIA 1 is not focusing on finding the most suitable start-ups in relation to their corporate values, justifying this by the short period of time available, the CIIA 2 points out that the start-ups should be able to fit at least in “some ways” to the OEM. The start-up 3 on the other hand, relates it to the existence of an industry- or product-related common vision or a geographical and thereby cultural fit. Start-up 2 mentions the first contact and smallness of the CIIA and the appropriate corporate fit, instead of the normal cultural gap that would be present with larger corporations. “But since they are really usually also really small, there is kind of a good fit between the start-up companies and these because they are a start-up by themselves, while with

the big companies, there is the cultural gap between the start-up and the super big corporate.” (Start-up 2)

Yet, the start-up 1 does not consider it as important.

“I do not really think that that is the main focus for us. It is more like having similar problems to solve, that is rather more the basis upon which we are choosing our

partners.” (Start-up 1) Selection Tools and Methods According to the CIIA 1 the use of selection tools or methods can be further expandable throughout time. The scouting activity, however, is one of the main tasks of CIIAs and

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can be done internationally, using a special start-up database, the corporate website, or the help from an independent accelerator program or a partnering VC.

“We have a partner […], they are a very big VC […], they help us scouting the start-ups. So, they enter their start-up ecosystems all over the world, whenever we share a

search field and they give us a long list of start-ups, regarding these topics or questions we give them.” (CIIA 2)

Additionally, advertisement for the CIIA, an already established contact or being asked to apply as well as the website of the CIIAs help the start-ups proactively register. “We get to know a lot of different new start-ups, because you are in the […] ecosystem. […]. So, we can give them some tips maybe [on] how to start, what to start looking for,

how to do this and how to do that. And we always advertise, or most of the time, we advertise [it] as being a good platform, or […] a good target.” (Start-up 3)

The second phase can then consist of an initial pitch or some administrative processes (e.g. legal checks). After that, the business units will choose who to partner with and a standardized onboarding process will take place. Selection Criteria The selection criteria can be either CIIA specific or start-up specific. Accordingly, the CIIA specific selection criteria types can be divided into; content and project related criteria, gut feelings, obligation of payment, normal venture capitalist criteria, internal departments’ necessity or integrity criteria (e.g. production conditions). When selecting the external start-ups, the start-up team as well as the advanced maturity stage of the start-ups are of outmost importance.

“The start-up should at least have some kind of prototype, some kind of experience in applications, that do not have to be necessarily in automotive [sector], of course.”

(CIIA 2) Moreover, an interesting product or service, adaptable non-industry specific solutions, the ability to conduct pilot projects especially regarding funding and personnel, being already quite successful can be further criteria that are asked for.

“[B]ut, of course, sometimes we get registrations through our website which are not fitting in the main clusters but then we find out that it [is] very interesting. Of course,

we have a look on that as well.” (CIIA 3) Start-up 1, however, is not generating any revenues yet and very small in size, whereas the start-up 2 states that the other tenants are usually larger in size than they are.

“[T]his basic business model that we had, or still have, is sort of a future market and not really available at the moment. Because we lack e-mobilists at the moment, or e-car drivers, we cannot really generate any revenue from conveying these advertisements.”

(Start-up 1) Nonetheless, all three start-ups took part in other incubation or acceleration programs, before joining their respective CIIAs, whereby start-up 2 even mentions;

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“I think we handled this initial step, where you need a lot of coaching” (Start-up 2) In the end, the start-up specific criteria can be illustrated by the wish for flexibility of the CIIA as well as in regard to the relationship, a physical proximity; a good corporate ideology and the overall reputation of the CIIA. “[F]or us it worked way better since […] at least it was closer, so you can easily jump

in, jump out.” (Start-up 2)

“I would probably never choose to work with a company, where the ideology or the main goal is bad in my opinion.” (Start-up 1)

4.3.3 Collaboration Between CIIAs and External Start-ups After having portrayed the organizational context and the partner selection process, we will now revise the detailed aspects related to the collaboration of CIIAs and external start-ups. Relational Aspects The relationship between the CIIAs and start-ups always depends on the individual start-ups as well as their products and services. Additionally, several stakeholders are involved in these relationships and therefore the approaches are different. However, in the case of CIIA 2 working with start-ups means being forced to work much quicker, integrating more agility, and providing fast reactions to new conditions.

“It is a completely other way of working if you are in touch with start-ups” (CIIA 2)

With the possibility of being a supplier-client relationship, the relationship can be both on a personal and professional level or generally professional. The personal relationships consist of a geographical proximity, more in-depth and personal conversations, so-called “friendships” with the CIIA manager or OEM contacts, more informal relationships or even special relationships, which can be closely related to the start-up spirit or the age correspondence of all contributors and are beneficial for the matchmaking process.

“I do not know, if that is because we are a start-up and pretty young. Or, if they do it with every supplier, but they do it with us.” (Start-up 3)

Sharing thoughts and feedback with the start-ups about issues concerning their BM and start-ups being invited to events or connected to new partners, belong to the professional side of the relationship. It is therefore clear that not all projects are set with the goal of a long-term collaboration or meant to be brought into the serial implementation processes of the OEMs. Furthermore, CIIA 1 sees the availability of projects, and therefore the existence of a necessity for new innovations and technologies by internal departments as a key factor of success, while CIIA 3 qualifies the collaborations with start-ups, in general, as a win-win situation. “Our goal is absolutely the pilot project phase that gives the start-up the chance to find out if the solution works in our big infrastructure. And, on the other hand, of course, it

is a win-win situation. This is a win situation for the start-up and our win situation is, of course, to find out if the start-up solution could help us to be faster or be better in the

end.” (CIIA 3)

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Start-up 3 defines the relationship with its partnering CIIA as very fruitful, which can be related to the fact of being extremely integrated in the CIIA environment but also profiting from its customer proximity.

“[This], I think, is the program we are most integrated in. And also, for us, the best program of all of these because they are helping us getting together with customers,

[and] also they bring in […] new use cases. Because they have a lot of different customers, customers having different problems.” (Start-up 3)

According to Start-up 2, the ability of the CIIA to match the start-ups with the interested department together with efficient communication skills are crucial to determine whether it is a valuable program.

“[I]f they would not do any matches it would not be a good program.” (Start-up 2) To conclude, all start-ups characterize their relationships with the CIIAs as successful, whereby success is defined by the connection to new strategic partners and the involvement in new projects.

“[W]e are basically looking for strategic partnerships which enable a new access to interesting partners.” (Start-up 1)

Collaboration Approaches CIIA 1 defines its collaboration approach with start-ups as a contract-based or project-based relationship as well as a teaching and cultural approach.

“It is a teaching approach and a cultural approach.” (CIIA 1) Projects arise out of a necessity or the interest to be innovative and are dependent on the current focus of the internal business units. The Start-up 1 on the contrary, states that it would not define it as either a contract-based or project-based, because it is not based on a contract. but more as a free collaborative partnership.

“[I]t is not a collaboration really, like contract based or so. It is more a free collaborational partnership.” (Start-up 1)

Another terminology for the collaboration is the venture-client approach. Accordingly, the collaboration is based on real-condition pilot projects and purchase orders of the start-up’s products or services. The OEM is therefore a potential client and the start-ups become suppliers, which gives the start-ups the chance to test the applicability of their product, service or the technology. “We do a venture client approach in this project. Of course, we do a little venturing and acceleration activities, but we do really focus on doing the pilot projects together with

the start-ups, based on purchase orders we execute with the start-ups. So, they get money for the projects, they do not do it for free. And, we help them to further elaborate

their technology, their products, their business models […] under real conditions. Because in that moment, in this cooperation, we are the clients of the start-up.”

(CIIA 2)

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Especially, for promising start-ups exclusive partnerships or special projects can be set-up as well. The last one, including a quick integration into the serial implementation or the visit of automotive shows together with the CIIA. Collaboration Process The collaboration process can mostly be defined as being future and solution-oriented, whereby the start-ups bring the solutions. The collaboration is standardized from the scouting process, the partner selection up to the matchmaking stage but also fixed on a limited time period, which is apparently necessary in light of the corporate culture of the OEMs. “We wanted to have it in a limited time span because if you give our colleagues in this

huge company too much time, nothing is going forward.” (CIIA 2) It is an individualized process, where one start-up is matched with one internal department and the internal business units then have the responsibility to develop these relationships further. The possibility for the start-ups to work remotely or collaborate with other start-ups exists. If the collaboration is fruitful the offered solution can be integrated into the serial implementation and accordingly multiplicated in the infrastructure of the whole group. If not, the collaboration will end.

“[W]e give the first project around 100 days. We are absolutely aware that after 100 days, you will not have a completely finalized product or process, which can go into serial implementation the day after. But after 100 days, you already know; “Yes, the

technology is applicable to our use case. It might help us solve the use case. And it fits to the […] needs and conditions.”" (CIIA 2)

Supporting Activities While corporates or customers spend money on start-ups, CIIAs mostly spend their time on start-ups. “[For] a corporation or also the [CIIA 2], […] their biggest asset is time. So, either the

corporates or the customers, […] we are working together with, spends money on us. Or the [CIIA 2] spends time on us. And both are their main assets.” (Start-up 3)

Hence, they matchmake start-ups with the internal departments, offer guidance (e.g. finance, planning, or for the development of the technology, products and BMs), payment or funding and also provide the start-ups with a physical space. The start-ups mentors are experts from special departments outside the CIIA, capital and knowledge come from the business units and alternative support can come from alumni or coaches. Nevertheless, most start-ups are not in need of guidance or coaching and describe the trainings as more time-intensive than beneficial.

“I also believe that a lot of the coaching they offer, are not super interesting for us” (Start-up 2)

Accordingly, guidance is part of the key activities of CIIAs but will only be provided if needed. The physical space on the other hand, offers offices, co-working spaces, worldwide offices and employees, or even hardware laboratories. All three start-ups

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therefore discuss the importance of the extreme proximity to the CIIA location. Unique for the CIIA 1 and Start-up 1 relationship is the offering of paid accommodation, a possibility gained through a strategic partnership of the CIIA with the city.

“They are partly moving into the factory because one point of the program is that the city […], which is the project partner of the whole incubator project, pays for

accommodation.” (CIIA 1) Besides this, most of the work happens via video conferencing or telephone calls. Lastly, auxiliary supporting activities comprise; kick-off workshops, administrative processes (e.g. NDAs, purchase orders, supplier number and registration), events, communication activities, problem-solving, pitch trainings, sharing the milestones and needs of the single business units, bringing start-ups together, helping in the search for application, and being a customer of the start-ups.

“We order things from them and we are putting money into [it]” (CIIA 1) 4.4 The Key Motives driving the Start-up and CIIA Relationship The key motives of the CIIA and external Start-up relationship will enlighten us on the different drivers involved as well as emphasize the attractiveness and usefulness of these relationships. CIIAs therefore profit a lot from working with start-ups and vice versa. Additionally, it should be considered as the base for proving the existence of coopetition in these contexts. 4.4.1 Access In general, CIIAs search for solutions (mainly in the area of software and IT) and access to complementary competencies, that are not related to their core functions of business. “[The] first goal overall is to get external innovation into our products and processes.

To do it in fields, where we do not have the competencies we would need to, this is mainly software and IT focused. We are a car manufacturer these are not the

competencies we have some tradition, let's say.” (CIIA 2) The start-ups thereby support the OEMs in the process of implementation and development of these products or services and try to simplify the corporates’ processes at the same time. On the contrary, they want to enhance scalability and growth and search for validity in the product development processes. “[T]here are some internal goals for us, like growing, of course, that is the first thing, strengthen our customer base, getting more customer [and] getting more partners.”

(Start-up 3) When it comes to knowledge the start-ups interest encloses market, field or project specific knowledge as well as corporate expertise. CIIA 2 also states that they look for expertise in agile and flexible environments. The goal of CIIAs is therefore to access external knowledge and bring it back into the corporation, while start-ups want to employ specialists and become experts.

“We want to become experts” (Startup 1)

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In this context, start-up mindset means testing out new methods (e.g. lean start-up, unstructured sprint classes, etc.);

“practically as a start-up we like to try out new things, methods like lean start-up” (Start-up 3),

or actively requiring employees, customers, partners and investors’ feedback to get more insights about the market and the viability of the start-up’s solution. Being open for multiple collaborations with customers and other players but also connecting different technologies, ideas and thoughts are in the start-up’s opinion characteristics for the start-up-like mindset. CIIAs, however, define it as an innovation mindset or the start-up ecosystem mindset. “And, of course, we have the point of inspiring, bring different impulses, a mindset from the start-up ecosystem into the company, into the organization. And then, of course we

want to give the start-ups the chance to test and to improve their products and services.” (CIIA 3)

Additionally, corporates are also in search for newness (e.g. innovation, new technologies and ideas), which can be provided by start-ups because of their unique or even future market-oriented business concepts. Last but not least, the access to new markets or start-ups’ activating a new player or accelerating the infrastructure is an option as well.

“[T]hat is basically what we could bring to [the OEM], that we could activate a new player on the market and accelerate the infrastructure.” (Start-up 1)

4.4.2 Organizational Learning Organizational learning is especially important in the sense that collaboration not only gives access to the previously stated resources but is also an exchange. Accordingly, CIIA 3 expresses the wish to inspire and bring in different impulses (see 4.4.1). One part of bringing in different impulses is to become more agile, faster and better, learning from the start-up spirit through the collaboration. This would offer OEMs the possibility to take efficient decisions in the context of uncertainty, be more uncomplicated, avoid hierarchical processes, take a fast-to-market approach and accordingly introduce innovation much quicker, by knowing the according methods. “And the third very important aspect is that people who do such start-up pilot projects also learn from the start-up spirit. They learn how they work, they experience the same thing I just told you; that you need to be more agile, quicker, take decisions even though you do not have all the necessary information maybe or not include any hierarchy you

might have to include if it is an internal process. So, they benefit a lot from working with start-ups. Not only in the topic field and their project work but also in the way the

start-ups work. So, it is also a cultural aspect.” (CIIA 2) While Start-up 1 sees itself as flexible but not agile, start-up 2 specifies being very innovative and flexible, particularly in the context of structural change, and start-up 3 states that start-ups are faster especially in their decision-making processes and that a collaboration would therefore help speed up internal decision-making processes. Already in the process of organizational and cultural change, OEMs need to change their mindset

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and get used to working with start-ups instead of only learning about the entrepreneurial culture, which is not suitable in CIIA 3’s opinion. “[M]y experience was that, if the start-up becomes a little bit bigger, they start to have the same issues in process and administration things, that they maybe cannot only be the cool entrepreneurs. So, they have the challenges as well, of course. And I think the

entrepreneurship is not the thing, which we get through them.” (CIIA 3) CIIA 1 emphasizes the fact that CIIAs want to profit and learn from this collaboration with start-ups by optimizing their own structure as well. This leads us to the topic of innovation. CIIAs bring the necessity and interest in being innovative, especially in regard to digitalization and transformation, want to learn about new technologies and new solutions and bring these into the large corporation but also their products and processes.

“What we do is to collect search fields within [the OEM], where our business units have the necessity or the interest of being innovative in a certain field or where they do

have use cases to solve.” (CIIA 2) Start-ups on the contrary are and stay innovative through quickly figuring out necessities of change, talking to customers, enlarging their scope and proactively questioning their own internal processes. “[Y]ou need to have an influence from the outside world. Because you can think of your

solution as the best thing ever, but it is not going to be that way” (Start-up 3)

One last aspect of organizational learning that can be related back to start-ups lies in the need for more structure when it comes to the innovation processes, something that corporates definitely can bring into the relationship.

“In that case we are kind of, in some way, unstructured sprint classes. […] So, it is a little bit more unstructured. Maybe in the future we need more structure.” (Start-up 3)

4.4.3 Competitive Advantages As CIIA 2 emphasizes the importance of collaborating with external start-ups. In this section, we will therefore discuss the possible competitive advantages gained, when CIIAs and external start-ups interact. One main point in this regard, concerns the end-customer benefits. Accordingly, CIIA want USPs and specialized offerings for their customers, whereas start-ups think that they want to create new ventures quickly to be able to please their customers or create new products that they will be able to offer to them in the future.

“I would say their key motive is to bring up quick start-ups for their customers.” (Start-up 2)

“And what we bring in is a cool technology, which they can offer [to] their customers.

So, their customers can have, maybe in the future, cool new products.” (Start-up 2) The importance of speed and fast implementation plays hereby again a major role. This can be illustrated by the fact that CIIA 1 wants to produce a product or service very fast,

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CIIA 2 expresses the wish to start with the pilot projects right away and CIIA 3 talks about selecting start-ups that are close to a solution.

“So, that we see that they are close to have the solution and therefore working on an optimized solution together with [the OEM].” (CIIA 3)

The main goal of the CIIAs is therefore to ensure that the start-ups will focus on the projects with the internal business units only. Therefore, CIIA handle all the surrounding issues for the start-ups to focus entirely on their work and not become slower through possible distractions or some long-lasting administrative processes.

“We can support them with administrative processes. As you can imagine, at [the OEM] there are a lot of them. And we want the project team to focus on their work,

whatever consents, for example, nondisclosure agreements, purchase orders, supplier number, registration and so on, all these administrative processes, we do them […], so

they can focus on they work.” (CIIA 2) This is in the start-ups interest as well, as start-up 1 talks about accelerating ideas and the service created by start-up 2 holds as a main advantage to make the process faster. With this, comes the chance of a very cheap and easy implementation. “In phase 2 we had a start-up working on a modular charging solution, which helps us, right now, to install these solutions in all of the […] factories worldwide, which makes it possible to install the charging infrastructure very easily and very, very cheap. And

this is quite a strategic advantage for [the OEM].” (CIIA 1) The integration of innovation in a faster manner than traditional suppliers or the corporates’ competitors apply as a competitive advantage too. “We can access expertise from them, we get quicker, a cultural change with new ways of working, and we are also able to introduce innovation in a much quicker way than

we would be able with traditional suppliers and corporation partners.” (CIIA 2) Finally, this goes hand in hand with the interested in broadening the product and service portfolio of the OEMs. 4.4.4 Growth The aspect of growth nearly exclusively counts as a key motive for start-ups. Their wish to scaleup within a huge organization, according to CIIA 1 can be opposed to the start-up 2’s main goal to grow their platform and involve more people.

“[T]he main goal is to really bring this platform forward and get more people involved.” (Start-up 2)

In the organizational context, start-up 3 talks about the possibility of internal growth or internationalization as well as increasing its number of employees through the CIIA support and its network. Corporates want to be part of this growth and the question is therefore how to include them. The implementation of new technologies, the increase in applications as well as the motives to strengthen and increase the customer base are all in the start-ups interest.

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“I think it is great for them to see a scale and how we scale, how quickly we scale, how

our product develops.” (Start-up 3)

Finally, and regarding the BM, a scalable product or a scalable business model should parallel with a flexibility towards different customer issues. “I think it is important to get to those customers as early as possible, so you can have a

scalable product or a scalable business model towards this.” (Start-up 3) 4.4.5 Co-Creation and Co-Development The main focus of this section can be related to the wish of CIIAs to avoid doing it all by themselves. Accordingly, the OEMs’ interest of product improvement or new product creation can therefore be connected to the start-ups interest in new projects. In regard to product and service development, CIIA present a broad scope of interest, ranging from products to services, where especially mobility services are a focus area as reported by CIIA 3. “[T]he key motives are that we become faster and that we do not have to develop all on

ourselves.” (CIIA 3)

Developing new products, improving existing ones as well as taking new products into the OEMs portfolio or working on collaborative products or services are therefore all related to the product and service development. Start-up 1 therefore sees these as future involvement possibilities.

“[I]n the future we are also planning to apply for more accelerator programs or incubators. But those will be probably mainly some which can be enabling some

strategic partnership.” (Start-up 1) Apart from the co-creation or co-development of products and services, engaging in these relationships also represents adding value to OEMs’ products or services or even better the co-creation of value. Strong interconnections between the CIIAs and the external start-ups are created, and as defined by start-up 2, both are even more “eager to make something cool happen”. This value can then be transferred into the whole organization and will positively affect the corporate strategy. “[T]herefore, we created something together with the start-ups, definitely, which helped

the whole company and the strategy.” (CIIA 1) The possibility to create completely new business cases together with start-ups and the opportunity for the start-up to see how efficient they work can emerge through this as well (see 4.4.7). The solutions can be co-created when both the OEM and the external start-up are interested and matched. Start-up 1 is hereby especially interested in finding partners that have the same problems to solve, are as described by start-up 2 the “perfect fit”. 4.4.6 Network According to CIIA 1;

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“that is one of the main purposes of the project, to provide them with useful contacts,

[and] connect them to interesting new people” (CIIA 1)

The matchmaking being one of the CIIAs highest strengths and CIIA network’s being the biggest benefit of this collaboration or even the CIIAs USP according to the start-ups, the CIIAs can really provide support by increasing the start-ups partner network. The start-ups are therefore interested in strategic partnerships which enable a new access to appealing partners in the same industry and might give them the opportunity to get involved in new projects at the same time. “[I]t was successful because we have set up good partnerships during that time of the incubator. And, it is also still giving us chances for new projects.” (Start-up 1) However, not only partners are important but also the clients the CIIAs are working with. Similarly, very interesting customer can lead to new opportunities and especially, when acquiring a large corporation as a customer, the prospects for this new collaboration are enormous (e.g. involvement with other business departments, etc.).

“[H]aving [the OEM] as a customer does not mean you have just one customer. You can have hundreds or thousands of customers, because they have so many departments.

And that is a big advantage for us.” (Start-up 3) To conclude, investors can be very important key partners for start-ups as well, notably in regard to the BM development.

“We have an investor, […] who is willing to invest into charging stations, if we find suitable areas where we could set them up. So, that is quite some big benefit for our

business model, or what we wanted to show and achieve.” (Start-up 1) Accordingly, CIIA organized events, give the start-ups the chance to meet investors and stay in touch. 4.4.7 Proof of Concept Particularly important for start-ups, the proof of concept can be illustrated by the pilot project phase, giving the start-up the chance to find out if the solution works in the corporate’s large infrastructure. Respectively;

“We want to give the start-ups the chance to test and to improve their products and services” (CIIA 3)

A real-life context, or a real time client test (e.g. in regard to product, BM, technology) through the practical uses cases is therefore created. This allows the start-ups to validate their technologies and discover how exactly it can fit in the systems, processes or products of the OEMs. “And we give them the possibility to run a real time test, let's say, or real client test with

their product, business model [and] technology” (CIIA 2)

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In general, the start-ups are very interested in the feedback that will result from these use cases or this trial. The technical development of the products or services can be further emphasized and the adaptability to different kinds of customers (see 4.3.3) and their corresponding needs can be further improved. According to start-up 1 it is also the first step to the projects that can be related back to the necessity to start at some point.

“First of all, for us, it is interesting to have projects to start at some point. And, bring up some proof of concept.” (Start-up 1)

4.4.8 Funding and Ownership The main activity or goal of the CIIAs being the match making, the funding or possible investments rounds by corporates are therefore seen as just a supplementary activity by start-up 2. When it comes to funding, start-up 2 states that the investment would come from the partnering VC and not the CIIA itself, start-up was not given access to funding either through the CIIA, however, start-up 1 considers it as an opportunity for the corporate to have equity ownership in this case. If promising, the CIIA can forward some details about the start-up to the internal M&A department and plead for a possible investment opportunity. This is the case for CIIA 2 and 3. We can give [the M&A department] the hint that this could be a very good start-up and

if the start-up is open as well. But this is not our decision in the end.” (CIIA 3) While for the Start-up 3 external investments are always welcome, start-up 2 considers the fact of being quite new on the market and in an attractive position and would not want to sell the venture at this point in time.

“[I]f you have a cool technology they want to have, then it is a possibility. The other

question is if you want them to buy your company. So, since they are usually quite new on the market and also quite in an attractive position. Usually, you are not thinking of

selling your company, when it is that way.” (Start-up 2) Joining a CIIA, however, is always a possibility. When taking into consideration ownership, buy-ins are especially relevant. Equivalently; “We are trying, with different brands, to push the M&A department to set-up up a kind

of VC fund, where we can invest in start-ups, in minority shares and […] very fast” (CIIA 1)

Yet, after having said that the CIIA 1 also state that buying shares or acquiring the start-ups might not be the best option overall.

“Therefore, it is not the best option to buy shares or to acquire the start-ups. Sometimes, the best option is an exclusive partnership or to qualify them as a supplier.

Or, do some strategic partnerships.” (CIIA 1) Thus, buy-ins are a possibility but not the main motive according to CIIA 2, whereas CIIA 3 does not consider buy-ins at all. Howbeit, exclusivity over the technology is a more plausible option in this regard. Start-up 2 thence discusses the relationship between

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buy-ins and a promising technology but also affirms that start-ups still choose for themselves if they want to be bought in or not. 4.4.9 Long-Term Collaboration Even if originally being based on a short time collaboration, the start-ups as well as the CIIAs state their interests in developing fruitful long-term collaboration, after the first pilot phase. Correspondingly, if the product or service can be exploited on a long-term perspective and are suitable for the OEMs, a long-term collaboration can be implemented.

“If the solution is good and if it can hold long term, what they promise. Of course, we are looking for long term collaborations.” (CIIA 3)

Additionally, regular contact even after the project phase, which for the Start-up 3 would be once a month or once every two months, arguments for the interest of CIIAs to remain in contact with promising start-ups. For the start-ups this also means being in indirect contact with the OEM.

“I am still in contact with [CIIA 2], maybe once a month or once every two months. And, yeah, with the [CIIA 2] team [and] also indirectly to the [OEM] company.”

(Start-up 3) In the end, start-up 1 is still in contact with the CIIA on a personal base, while start-up 2 is working in the same building. Finally, CIIAs talk openly about the possible use of the products or services in the future, and therefore the start-ups can adjust to that knowledge. 4.4.10 Reputation and Recognition Lastly, a supplementary aspect to consider when it comes to the key motives of the CIIA and external start-ups relationship is reputation or recognition. While reputation can be important for either one of the parties, recognition concerns solely the start-ups. For CIIAs it is therefore important that start-ups advertise and recruit in the start-up ecosystem and state them as a reference for collaboration.

“Sometimes you think about these big companies and [you] have the feeling that they are just inside of these start-up ecosystems, just to be there and say: "Okay, we are

doing start-up stuff" (Start-up 3)

The concept of CIIA, can also be used by corporates as a PR strategy or a marketing, to foster the image as an innovative company. On the contrary, for start-ups it can also open new doors to new partnerships, as it is directly supported by the OEM.

“[I]t was quite easy to set up collaborations with other partners through [the OEM], because everybody was looking for a partnership with a start-up, which is supported by

[this OEM].” (Start-up 1) Appropriately, start-up 3 states that the partnering OEM is a very “good reference”.

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“And so, they then use us, as an example, for how start-ups can be in the program and how a cooperation can happen.” (Start-up 2)

In the end, it is also about recognition for the start-ups. The start-ups want to get the feeling of being desired in regard to the collaboration and showcased in front of promising partners and customers. The value of these relationships, for the start-ups, is therefore also to increase their reputation. 4.5 Coopetition between CIIAs and External Start-ups 4.5.1 Challenges & Risks CIIA 1 First and foremost, the cultural clash between CIIAs and start-ups has to be outlined.

“Within huge organizations some processes and some decisions take much more time than in a start-up. I think this is also a learning for them, their expectation is a different one. But sometimes, they have to learn that they have to wait for decisions. And yeah, it

is also kind of a cultural clash for the start-ups.” (CIIA 1) Accordingly, the character of the start-up can be too risky for the CIIA, the start-ups can possess divergent expectations or be too impatient in regard to the decision-making processes. “The character of a start-up is always risky, or most of the start-ups. And therefore, you

should know that sometimes it can also happen that a start-up [...]stop[s] before starting the whole program. So, those are one of the risks. [And], that start-ups are

brought into bankruptcy or something like that, does not have any money, or stops the operations.” (CIIA 1)

On the other hand, the learning process can be exhausting, internal department might be too embedded in the traditional organizational processes and it could happen that the partnering internal department is missing, respectively hindering the matchmaking. “Otherwise, we spend a lot of time to find the right partner for them. The last class was

a little bit challenging regarding this topic because, with 2 start-ups, it took us more than 2 months to find the right project partner.” (CIIA 1)

One other challenge for the CIIA 1 can be illustrated by the fact that some of the start-ups involved in the relationship with the CIIA, where not ‘physically’ taking part in the collaboration process as much as would be required. “But in some kinds, we see them at day one, and then, they disappear completely. And

then, we are not that lucky with this situation.” (CIIA 1) Additionally, information security, the inability to buy shares or to engage in other forms of equity partnerships with start-ups remain a challenge. Especially, when fast actions are a requirement in that context. Higher risks exist when the partnerships with start-ups end before or during the program, due to bankruptcy, no availability of funds or the ceasing of operations. Finally, other CIIA programs can be seen as possible competitors, competing with the CIIA in the light of the valuable relationships with external start-ups.

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CIIA 2 For the CIIA 2, overpromising start-ups and their unreliability in comparison to established suppliers as well as the possible splitting up of the start-up team, are all aspects combined with challenges and risk for the CIIA.

“Of course, they are some problematic cases, especially when start-ups are overpromising. Or, we also had cases when the start-ups had several founders and then

they split up during the project.” (CIIA 2)

In addition, as for CIIA 1, other large corporations interested in collaborating with external start-ups could be seen as possible competitors. “But when you have the situation, for example, that a start-up has the offer of working with [one OEM] and with [another OEM], which is also part of our platform, then we

are competitors of course.” (CIIA 2) CIIA 3 CIIA 3 is raising the issue of start-up’s increasing in size and therefore having to face the same administrative and process issues as larger corporations (see 4.4.2). Similarly to the other CIIAs, the liquidation of the start-ups can be a problem. Respectively, start-ups are very young and unexperienced and especially in regard to confidential knowledge and corporate communication strategies, their mindset can be extremely different from the one of the OEM.

“And possible disadvantages are that, they are often very young and often very unexperienced. So, that they sometimes not really know how to act with, or to

communicate with, a big company like us, or what is to communicate or what not.” (CIIA 3)

Furthermore, only one project out of ten goes further, while for the others either the solution did not correspond to what was promised, the product or service was not sophisticated enough, or it did simply just not fit into the corporate’s vision. “But it is okay, as a said, in the whole context of innovation, it is normal that you do not

get ten innovations from ten innovation ideas” (CIIA 3)

Further challenges and risks could be associated with the start-ups restricted knowledge or some start-up team malfunctions. However, the CIIA 3 also states that it takes a long time for corporations to integrate new knowledge into the organization as a whole, whereby through the collaboration with start-ups, motivations can be stimulated. “I think in different clusters, topic clusters, they have more knowledge, more knowledge in different points, where we, of course, in the new topics of AI and all these things, we are building up the employees and bringing in specialist and experts in that points. But it is a long way to get the knowledge into the company and with them, we have a good

point to bring it in.” (CIIA 3) Start-up 1

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In contrast, the challenges and risks that can be associated with start-ups can concern the inexperience or lacking expertise of the CIIA employees to implement such strategies, the absence of standardized processes, knowledge drain, and the administrative difficulties for the reception of money in regard to the start-up’s offered products or services.

“I had the feeling that they did not have any experience, or expertise, in how to set up such a program. So, there were also some difficulties to receive the money, because it

was not a standardized process, and they did not know how to do it.” (Start-up 1) Additionally, the start-up 1 is does not have a fixed BM yet and is neither showcasing any profitability, which naturally comes along with supplementary challenges.

“We have had quite a few pivots. So, our business model is not really fixed yet.” (Start-up 1)

In the end, however start-up 1 is stating that it is the start-ups responsibility to check if the corporate could be a possible competitor or not. “And I have seen also that, some start-ups in the first class, one for example, which was

failing in the end because [the OEM] had almost the same product” (Start-up 1) Correspondingly, if the start-up is looking for investment an involvement with previous large corporations might have consequences on the investor’s decision. Start-up 2 For start-up 2, the prevailing embeddedness of the traditional corporate culture when it comes to their ‘more traditional’ customers can be a challenge. “[T]hey come from their old perspectives, from their old industries and now want to do

something new. But since their head is already filled with all the stuff from the last 5 years, 10 years, they really have a hard time to innovate on that because they are kind

of in the same field since years.” (Start-up 2) The connection between the start-up’s internal communication processes and overdelivering also present another challenge to overcome. Accordingly, usual project management problems, offering the start-ups’ products or services for free due to low bargaining powers, futile coaching, lesser growth acceleration or even the possibility of inaccurate partner networks, are all possible challenges arising in the context of CIIAs. “Disadvantages could be that the department in that big company is not accelerating as expected. Or is not having the right linkages or the good network, which is establishing

you in that big company.” (Start-up 2) Moreover, regularly updating the technology to stay innovative is a must. Whereas, most important are the efficient use of time, taking initiatives, appropriately organized CIIAs, and the need for informal relationships to open up about the real business concepts issues.

“[I]f you only have this super strict business relation then usually you are not talking about issues you have or things that just came into your mind” (Start-up 2)

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Lastly, a discontinuation of the collaboration between CIIAs and external start-ups can appear, especially when the start-ups faced some structural changes that the team was not able to overcome.

“There was one [start-up], they started initially but then inside the company their structure changed and that is way this project did not happen.” (Start-up 2)

Start-up 3 Following start-up 2’s insight, the specific number of team members and the overall structure of a start-up can be a significant challenge in general. The danger of a cultural drift, if not managed correctly can therefore be highlighted. “Because I do not want to have a big drift, as it is culturally dangerous in my opinion.

Especially, if you grow a bigger company.” (Start-up 3) In addition, start-up 3 states that start-ups are quickly disappointed, when promises are not held.

“I mean, they always said they would do it and then they were sometimes in contact with us, but nothing got really to the point.” (Start-up 3)

Hence, not all customers met through the help of CIIAs will become valuable contacts. As for start-up 1, the small size as well as the related inexperience is for start-up 3 an important issue to raise as well. Furthermore, cultural clashes can be revealed during the relationship, especially in regard to communication, the risk that the start-up will disappear from the highly dynamic markets within a few years, together with the challenge of constant efficient time management and the possibility of competition between start-ups in the context of CIIAs, are clearly aspects to consider.

“If a company, a big corporation, works together with start-ups, they have the possibility to get things done fast but there is also the possibility that the start-up will

not exist in one or two years.” (Start-up 3) To conclude and importantly, a greater network and a higher number of workshops are some ideas for the improvements of CIIAs. 4.5.2 The Balance Between the Sharing and Protection of Resources

“So, whenever we see that this might be something we should protect, then we start doing this from the beginning on.” (CIIA 2)

Accordingly, CIIA share resources, knowledge, stakeholders and services (e.g. crash tests, testing batch, interviews with real customers and quality assurance) with their partnering start-ups. Whereby the sharing of resource always depends on the project, the CIIAs try to meet the start-ups needs by ensuring the availability of project or industry specific data as well as testing and improvement possibilities.

“I think we always try to help them to improve the service or the product. And it depends on the project, of course. If it is a production project, then we try to give them

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real production data, that they can test and improve the product or service. Maybe, not real, but real in the way how the production line is working, when do they have a high

work level, and when does it go down, and all these things.” (CIIA 3) Following, we will now further elaborate the balance between resource sharing and protection in the CIIA and external start-up relationships by focusing on NDAs, patents and IP, transparency, networks, funding as well as stakeholders. NDAs According to CIIA 1, NDAs are a part of the standard processes of CIIAs, while the CIIA 2 supports this by adding that the project should not be revealed to any other parties that are not involved in the relationship.

“We do have a non-disclosure agreement in the beginning of all pilot projects, so neither a project partner can talk to other corporates about the project, neither the

start-up can do so.” (CIIA 2) Patents and IP The IP belongs and stays with the start-ups at all times. However, the CIIA 1 uses a contract to be able to have limited rights in this regard, by the way of paying a fee.

“But we make a contract we them that we are allowed to use it, for a license fee” (CIIA 1)

The possibility to share the IP, however, is dependent on the project and product created;

“The patents and IP that has already been created by the start-up remains with them. And any patents or intellectual property create during a pilot project is either from both

of the partners or stays with the start-ups and we have special licensing rights” (CIIA 2)

The start-up 1 and 3, on the other hand state that for them it was a necessity to secure the IP before engaging in the relationship with CIIAs, and that it has to stay with them at all times. The start-up 2 however defined it as dependent on the individual customer-supplier relationships.

“You need to define this by your own with your customer.” (Start-up 2) Transparency When it comes to the transparency, CIIA 1 states that all project-relevant knowledge is appropriately shared with the start-ups and that only the main corporate strategy is something that will stay confidential. “And we do not tell them that much about our strategy and they do not tell us that much

about their strategy” (CIIA 1) However, the CIIA is still informing the start-ups if there is an interest from the corporate side to engage in a long-term collaboration and therefore possibly integrate the products and services offered by the start-up into the OEMs strategy.

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“But the communication should be very transparent with the start-ups. It should be a partnership on the same level.” (CIIA 1)

The CIIA 2 calls this the “need-to-know principle”. And apart from the internal knowledge that cannot be shared the CIIA 2 sees itself as very transparent in regard to the relationship with the new ventures. CIIA 3 adds, that it is also important to be transparent of the expectations and it should be the focus of the CIIA. “I would define our self as transparent of course. We say what they can expect from us

and what not” (CIIA 3) Hence, the CIIA 3 is not sharing any competitor restricted knowledge with the start-ups. Similarly, start-up 2 emphasizes the CIIAs previous statements and affirms that it is common in the automotive industry to keep specific projects secret and that corporates are also known to erase the upcoming issues quickly.

“So, I would say, for me, that is an open environment, especially in the industry field, where usually […] [the competitor] is working on something and nobody else is even

telling you that they are doing that.” (Start-up 2) On the contrary, start-ups’ 1 only restrictions concern the algorithm and the specific codes vital for their product, the explanations all around the business concept are though shared openly.

“And we are also, I would say, working quite transparently with our ideas and not really hiding them from any competitors or so, because we figured that, this is rather

holding us down and, working on it transparently opens many more doors.” (Startup 1) In the same manner, start-up 3 talks very transparently about its BM and tries to be as open as possible. Correspondingly; “the most important thing, for us, as a start-up is to get better and the more transparent

and the more open and honest you are about what you are doing, […] the better feedback you can get. And the better feedback you can get, you can usually better

develop.” (Start-up 3)

Start-up 3, thus, highlights the fact that the large corporations try to be as transparent as they can in these kinds of contexts, sharing everything that is not confidential, sometimes even market intelligence insights. Networks, Funding & Stakeholders According to start-up 2 and 3, the sharing of networks did not fall under any restrictions. Equivalently, start-up 1 states that there were no limitations when it came to funding. However, the possibility that restrictions might be available now is an option.

“No, they did not have any restrictions. But, I think, they put restrictions on it afterwards, for the second class.” (Start-up 1)

Finally, when it comes to the sharing of the OEMs’ stakeholders, start-up 1 states that they are working together with car dealerships, which could be seen as the corporates’

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partners whereas the start-up 2 and 3 accentuate more on the sharing of customers with the CIIA; “They support us in finding new customers, [and] we also support them on finding new

companies.” (Start-up 2) 4.5.3 Trust While the CIIA 3 emphasizes on the importance to trust each other, in general, as well as to trust in the start-ups’ team, CIIA 2’s relationship with the start-ups can be defined as trustworthy as the standard client-supplier relationships, with the majority of pilot partners being trustworthy.

“As trustworthy as client and supplier relationships are usually” (CIIA 2) For CIIA 3, an analysis of the start-ups, frequent contacts in the first stages of the relationship and the focus on having trust are interrelated.

“We are analysing them, and we speak with them, and we get to know the team in the early phase, we have a focus on having trust, of course, in both directions. And in the

end, we need to bring the trust into the department, which is giving them the order and onboarding them as a supplier. Most of the time, it did work very well.” (CIIA 3)

Important here is to bring the trust into the internal departments, which according to CIIA 3 mostly worked well. Most significantly; “I think you have also always to deliver what you have promised, that is very important. And then, you will get a trustful relationship between the start-ups and the corporate”

(CIIA 1)

As the act of sharing is related to trust and in light of customer relationships, start-up 3 believes that openness towards the customers can enhance mutual understanding, as the customer will be motivated to openness equally. Start-up 1 discusses that trust is created by itself and depends on the dynamics between the different participants in the CIIA ecosystem. Accordingly, if none of the other start-ups is seen as a competitor, this will possibly lead to a more open and collaborative atmosphere. “[The CIIA] managed to bring six different start-ups into the incubator, who were not

competitors to each other. So, it was really easy, when everybody was there in the incubator, to speak openly and not feel like one of the other start-ups might be a

competitor, and so that we had to hold back any information.” (Start-up 1) Start-up 3 defines the exchange of knowledge about customers and external approvals as significantly relevant in these kinds of environments. In agreement with start-up 2, geographical location and the according proximity of the two partners can increase the trustworthiness of the relationship. Moreover, a long-term perspective, the exchange of openness and matching the different needs of both entities is crucial in this context. “I think the trust needs to be good. And so, I believe one of the phases that we really try out [is] to exactly match these different parties and make all the parties happy. But that

is something that you cannot see from the first time, you really need to see it over a

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long-lasting period. [But] if we would not be located close to them, the trust would be on a different level. It would be more an additional perspective, where you have, let's

say, the usual trust but it is not super specific.” (Start-up 2) Lastly, one big advantage that start-ups can bring into these relationships is honesty.

“And that is one of the big advantages, I think, of working together with start-ups, because it is in our interest to be honest.” (Start-up 3)

Therefore, and for start-up 3 it is in the start-ups interest to be honest and honesty leads to trust. 4.5.4 Opportunism In consideration of opportunism, the CIIA 2 specifies that the internal departments can profit from the start-up’s knowledge about solutions, to find solutions themselves. The CIIA 2 also states that other business units are currently being developed and that the concept of cooperation between the CIIAs and the external start-ups should be seen as an interim approach.

“We are a car manufacturer these are not the competencies we have some tradition, let's say. These are business units we are still developing, and, in the meantime, we do

cooperations.” (CIIA 2) CIIA 3 accentuates this, by portraying the highly dynamic market situations resulting in making some of the start-ups obsolete and therefore interchangeable for the corporations.

“So, sometimes it is so quick, of course in the start-up world as well, that today is a start-up XY the right one and in half a year the other start-up, is the right one, because

the other start-up has a better solution.” (CIIA 3) Correspondingly, the CIIA 1 underlines the meeting of new teams every half a year as a main advantage. However, on the other hand start-up 2 highlights that at some point in the start-up’s maturity stage, CIIAs might become useless or obsolete. Hence, this is only the case if the start-up’s goal is not to get access or collaborate with new clients.

“[…] I think there is also a limitation when you reach the point, where you can say: "Okay. Now it is not making a huge difference". Except for if you want to land a new

client, and this one is then active in such an area.” (Start-up 2) In the end, start-up 3 tells us that they are not working on the same products as the start-ups are.

“I am not thinking [that] they are developing the same thing we are doing.” (Start-up 3)

On the contrary, start-up 1 raises the issues of idea imitations by corporates to improve their own products and services. “And I have seen also that some start-ups in the first class, one for example, which was failing in the end because [the OEM] had almost the same product. And I talked to the

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founders and they said: "Yeah, they might have looked what we have and also just copied some ideas, to improve their own product." So, that might happen.” (Start-up 1) 4.5.5 Possible Competitional Tensions Between CIIAs and External Start-ups When it comes to the question of possible competitional tensions between OEMs and start-ups through the CIIA’s platform, the CIIAs 1 and 2 illustrated competitors as being other large corporations (see 4.5.1). Accordingly, it could be seen as determining that the start-ups are not large enough, in their opinion, to be able to even compete against large corporations, like these OEMs.

“I did not experience that until now. Because always they have a specific product or service, which the internal department does not have.” (CIIA 3)

Appropriately, the CIIA 3 on the other hand, claimed that the possibility of start-ups being competitors was not yet been experienced. Especially, when considering that in most of the cases they bring complementary products and services into the organizations and not, in fact, similar solutions. CIIA 1 also stated that the start-ups did not have similar products or services and that these were, as well, a needed complementary product or service.

“Sometimes it is a missing service, which we would like to have. Sometimes, it is also kind of an add-on.” (CIIA 1)

However, the CIIA 2 state that there was indeed a possibility of sharing similar products and services with the start-ups. Which is also supported by the following quote from start-up 1; “And I have seen also that, some start-ups in the first class, one for example, which was

failing in the end because [the OEM] had almost the same product.” (CIIA 2)

To conclude, the discrepancies between the different entities can be seen as a sign that this relationship is not easy to grasp. Accordingly, it can maybe not be classified only as either a collaborative or a competitive relationship but should be analysed in regard to both of these simultaneously. The next chapter will therefore analyse and discuss our empirical findings together with our theoretical framework and further enlighten us on the key motives of this relationship as well as the coopetitive environment in which it is existing.

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5 Analysis and Discussion With this chapter, we will state and interpret the connection of our empirical findings with the previously elaborated theoretical framework, characterizing the major aspects and influences in regard to the coopetitive relationship between CIIAs and external start-ups. Accordingly, new insights, possible nonconformities as well as joint assumptions will therefore be portrayed. In the first part of this chapter a general overview of the relationship between CIIAs and their partnering external start-ups will be given, followed by a more detailed and structured explanation about the different dynamics present in this coopetititive relationship. 5.1 The CIIA and External Start-up Relationship First of all, our empirical study showed that two out of the three CIIAs that we interviewed emphasized that they did not belong to only one of the streams of CIIAs (e.g. CI, CIL or CA) and even defined their individualized concepts as clearly orchestrating all three of these approaches. We can therefore relate the concept back to Vázquez Lucerga’s (2018, p. 114-115) previously elaborated model for integrated open innovation and the three stages of CIIAs (see Figure 8), and elaborate the empirical findings in this regard; The first stage of the CIIA and external start-up relationship starts with a scouting and registration process, whereby the application process can be divided into three categories: the start-ups proactiveness, the CIIAs’ proactiveness and a third person’s proactiveness. The last one can be closely related to the fact that either another start-up or partner can advertise for the CIIA and therefore motivate the decision of the start-up to engage in such relationships, or, on the other hand, the start-up itself can register through the website of the CIIA or take part in an event. The second-last category, where the CIIA’s proactiveness is needed, can be illustrated by the fact that the start-up might be scouted or contacted through an email, a phone call or a personal contact and would simply be asked to join the platform. The selection process can then include, the invitation to an initial pitch, administrative processes, as for example, legal checks or a selection through the business unit itself. After that, an onboarding processes will characterize the end of the first stage. The second stage of the relationship consists of working together with an internal department of the OEM to find an answer to a challenge that the business unit could not resolve by itself. This is also the time, when the co-creation or co-development of the products or services happen between the business unit and the external start-up. Accordingly, a real-life context through the pilot phase or the use cases, enables the start-up to test its products or services. However, this is also giving the corporate business units the opportunity to test-out the relationship with the start-up on another level. The third stage might be either already ongoing, together with the second stage, as for the supplier-client or venture-client approach for example, or, the start of a long-term collaboration after the pilot phase. Correspondingly, the supplier-client or venture-client approach both induce profitability or scalability sooner, as the relationship is based on purchase orders and the start-up is therefore already getting paid and offered the possibility to increase its customer base. The long-term collaboration on the other hand, can activate profitability and scalability either through the integration of the start-up’s product or service into the serial implementation process of the OEM or through a long-term oriented partnership opening doors to other partners or customers, reasonably leading to profitability and scalability.

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Additionally, the CIIA and the external start-ups being defined by their smallness and newness, they have a lot in common when it comes to their organizational structures and cultures. Accordingly, Waguespack and Fleming state that the creation of an open innovation environment through the collaboration of both parties, turns out to be very beneficial, whereas Schuh et al. (2017, p. 2) stresses the importance to create start-up-like environments. In general, outside-in open innovation is determined by Chesbrough et al. (2006, p. 2) as the acquiring of external knowledge and technologies through stakeholder relationships with the ultimate goal to increase the corporation’s innovation capability. Similarly, both the CIIAs and the external start-ups are defined by their future-orientation, flexibility and customer centric approaches as well as their innovative environment driven by the willingness to explore new innovative methods on a regular basis. Even with young and unexperienced employees, especially in regard to the set-up of the organizational structures, both are based on small teams simultaneously justifying the broader scope of responsibilities for each individual employee. While this is in accordance with Birkinshaw (2005) and Solis et al. (2015), who state that the small size not only brings challenges in regard to inexperienced management but also strategic uncertainties, Abetti (2004) emphasizes the importance of a long-term perspective, which can here be related to the future-orientation of the CIIAs and external start-ups. In line with our empirical findings, Vrande et al. (2009, p. 423) therefore stress the fact that SME’s engage in open innovation strategies to gain access to customers, whereas also adding that they, in a similar manner, aim to decrease the complexities of competition. Moreover, in the literature the goal complementarity of CIIAs is highlighted by the aspects of promoting new valuable ventures, focusing on value creation and competitive advantages as well as efficiently increasing economic growth and the individual innovation capabilities (Gertner & Mack, 2017, p. 2; Isabelle, 2013; Prajogo & Ahmed, 2006). Appropriately, the common goals that are shared with external start-ups in this respect are therefore; the access to complementary resources, the co-creation or co-development of products or services, the co-creation of value as well as the access to proof of concept processes. While the new ventures might be more interested by partnerships and relationships to new clients, the CIIAs’ focus is indeed on innovation and competitive advantages. Following Lazzarotti and Manzini (2013, p. 53) corporates engage in such open innovation environments and relationships to obtain additional knowledge, further enrol in idea explorations as well as reduce costs. Economic interests, however, were less emphasized in the empirical study. Hence, these could be seen as a consequence of the increase in the start-up’s growth opportunities or the CIIAs’ competitive advantages. Finally, dependent from the parent corporation, and more specifically the R&D or the innovation department, the CIIA can be seen as an intermediary or gate keeper between the start-up ecosystem and the innovation networks within the core organization of the OEM. Accordingly, the dependence on organizational R&D departments as well as the CIIA 1 being the result of a full strategic shift, the relation to Ruff’s (2015, p. 45-46) corporate foresight units should be displayed. Foresight units, therefore, are relevant to discuss in this context as they are meant to detect disruptive innovations, enhance internal knowledge advancements, actively participate in corporate innovation and focus on acquiring external knowledge, which is, when taking a broad perspective, exactly what CIIAs do or are meant to do. The next sections will therefore illustrate, the power relation,

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common stakes, key motives and possible implications of coopetition, further proving the existence of such coopetitive relationships between CIIAs and the external start-ups. 5.2 Key Motives of the Coopetitive Relationship between CIIAs and External

Start-ups 5.2.1 Access Through the collaboration with CIIAs, external start-ups mainly want to access the CIIA’s network as well as profit from all the other opportunities that come with it. In regard to knowledge, corporate knowledge as well as industry or project specific insights can thereby provide the start-up with main advantages. Additionally, the CIIAs organizational cultures and contexts can be seen as a safety and support net, where start-ups can engage in real-life client and partner relationships but are still provided with expertise, guidance or even capital, if needed. While resources and knowledge are transferred and co-shared, funding depends on the CIIAs’ strategy as well as its organizational structure. Moreover, this exact organizational structure also allows the external start-ups to collaborate with other start-ups in the CIIA landscape and thus gain a detailed overview of their customer-centred market. In addition, Hora et. al. (2017, p. 427) describes the corporate internal resources, as one of the key factors of start-ups engagement in coopetition. Accordingly, this can be related to the fact that the start-ups, being more mature start-ups, are mainly interested by the access to the corporates infrastructure to test the viability of their offerings and increase their existent customer base. Furthermore, the support in relation to the general organizational development of the new ventures (Christiansen, 2009) can be connected with the start-ups thrive to constantly adjust their business models. While for Vázquez Lucerga (2018, p. 103) complementarity in the aspect of resources is important, Gassmann & Becker (2006, p. 11) highlight the quality and relevance of knowledge. Hence, the access to new markets, customer segments and the decrease in uncertainty and limited decision-making are of outmost value in this context (Levitt & March, 1988; Levinthal & March, 1993). Accordingly, less emphasized in the empirical findings, on the start-up side, is the access to new international markets (see Bell et al., 2003). However, this could be closely related to the notion of acquiring new customers, accelerating growth as well as expanding the start-ups present network (see Vázquez Lucerga, 2018, p. 103). The CIIAs main support, contrariwise, is thereby focussed on the expansion of the start-ups network (e.g. increase in customers, contact to CIIA partners or other start-ups), while cities can be main sponsors of CIIAs, offering additional services to start-ups, as for example, free accommodation. For the CIIAs, and accordingly the OEMs, the access is directed at newness and markets but also the start-up ecosystem as whole (Hochberg, 2016, p. 447). While newness includes innovation, new technologies (see Hora et al., 2017, p. 419) and ideas, disruptive business concepts and the focus on future possibilities and digital markets, new markets mostly involves discovering new market segments. Accordingly, start-ups share their mindset together with their agile and flexible innovative approaches. These start-ups through the platform of CIIAs therefore bring new innovations and findings into the parent OEMs and their according business functions (Vázquez Lucerga, 2018, p. 97). In the light of the start-ups search for strategic partnerships however and the incorporation of stakeholders (Sarasvathy et al., 2014), CIIAs are also provided with new customers or partners through the collaboration with the start-ups. Finally, whereas the start-up becoming a customer (Weiblen & Chesbrough, 2015) was not considered in our empirical

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findings, enabling new market players or the acceleration of the market infrastructure can be seen as significantly beneficial in regard to OEMs competitive advantages and survivals. 5.2.2 Growth Growth corresponds to one of the major motives for start-ups to engage in the relationship with CIIAs, whereby this is especially concerning the growth of their customer base or internationalization activities. Accordingly, this can be related to the exploration and exploitation of new market opportunities (Chen & Wang, 2008; Sullivan & Marvel, 2011). Whereas, one could even consider calling it a riskless internationalization (World Economic Forum, 2018, p. 7). Correspondingly, scaling up within a large corporation or growing their platform or scope, are key factors connected to the new ventures’ growth. With internationalization or internal growth thereby being the main focus. In equivalence, the possible growth of the employment capability (Eftekhari & Bogers, 2015; Scillitoe & Chakrabarti, 2010) or the attainment of profitability (Latouche, 2019, p. 24), go along with the start-ups wish for new team members or the planned generation of future revenues. The increase in sales, internationalisation and growth acceleration are therefore closely linked (e.g. Hora et al., 2017, p. 419-427; Hoffman & Kelley, 2012). To conclude, growth has therefore not only positive effects on the start-ups profitability but also on their BM development as a whole. 5.2.3 Proof of Concept The cooperation between CIIAs and external new ventures being mostly project-based, the CIIAs’ use cases or pilot phases give start-ups the opportunity to test but also to improve their products and services in a real-life context. In line with our empirical results, the relationship between CIIAs and external start-ups therefore enables start-ups to test out their innovations and respectively create new products or services (Chen & Wang, 2008; Sullivan & Marvel, 2011). Accordingly, Vázquez Lucerga (2018, p. 103) sees it as having a positive effect on the reputation of the start-up as well as increasing the general awareness about the start-up’s product or service. However, while Hochberg (2016, p.32-33) associates the necessity of coopetition with the gain of pitch expertise, the start-ups proved to be solely concerned with the proof of concept, focusing less on the guidance and other possible organizational support systems. 5.2.4 Co-Creation and Co-Development The main focus of this co-creation is to enable both the CIIA and the external start-up to create value, especially on the grounds of not being able to do it by themselves. Co-creation and co-development are therefore associated with new product development, the co-production of innovations and the advancements of the current product portfolio (Hora et al., 2017, p. 419; Weiblen & Chesbrough, 2015). While positively affecting economic growth, the co-creation of knowledge (Karatas-Ozkan et al., 2005, p. 42) should also be included in this section. Profiting from economies of scale (Gassmann & Becker, 2006, p. 11) and a cost decrease, as for example, for the search of suitable investors (Hochberg, 2016, p. 32-33) can thence be associated with CIIAs spending both their time and capital on these coopetitive relationships, while the start-ups mostly use their assets of time and innovation. In the same manner, co-creation or co-development also means adding value to existing products or services (Weiblen & Chesbrough, 2015), portrayed by the start-ups products and services being add-ons. Additionally, seeing the new ventures as either an ‘outsourced R&D’ department (Prats et al., 2017, p. 9) or a supplier accentuates the intensity of this co-creational relationship. In the end, a result of this co-creational process

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is that, it enhances the collaborative dynamics and therefore could be a major factor in the coopetitive relationship, downplaying other tensions which might reinforce the competitional side of the coopetition. 5.2.5 Organizational Learning According to Ireland et al. (2003) and their model of strategic entrepreneurship, the entrepreneurial mindset and culture encourages the development of innovation, based on the corporates’ appropriate strategic resource management, ultimately leading to competitive advantages (Ireland et al., 2003, p. 967). The entrepreneurial mindset can, by that, be seen as “a growth-oriented perspective through which individuals promote flexibility, creativity, continuous innovation, and renewal” (Ireland et al., 2003, p. 968). Accordingly, the OEMs wish is to become agile, fast and increasingly efficient and be able to take the most suitable decisions in the context of uncertainty. This can therefore be symbolized as a learning approach in the context of open innovation (Fredriksen et al., 1990; Sætre, 2003; Smilor, 1997; Walter et al., 2006) and goes hand-in-hand with the start-ups chance to further boost innovation and entrepreneurship (Wong et al., 2005). Hence, CIIA 1 defines it as both a teaching and a cultural approach. Whereas CIIAs want to focus more on the efficiency and speed of decision-making processes and therefore separate themselves from the complex organizational structures and internal systems of OEMs (Leonard- Barton, 1995), the start-ups are, on the contrary, interested in the large infrastructure of the OEM as well as the possibility to gain structure. However, learning more about the entrepreneurial culture, is not something that was stated during neither of the six interviews and could be mostly replaced by the words agile, flexible, speed and innovative. Thus, the terms ‘entrepreneurial’ and ‘agility’ are mostly connected with each other in these kinds of contexts (World Economic Forum, 2018, p. 7). Moreover, Hora et al. (2017, p. 419) illustrate the solution-oriented mindset as a crucial part of these coopetitive relationships, which can be justified by the fact that the relationship between CIIAs and the external start-ups is mostly based on a future and solution-orientation. Lastly, the organizational learning being not only restrained to different innovation approaches, a complete or regular organizational change in terms of structure can also be part of the organizational learning approach (Hora et al., 2017, p. 419). 5.2.6 Competitive Advantages When having the end customer in mind, being able to offer specialized USP can indeed provide the OEMs with a significant competitive advantage. Together with a fast and cheap implementation of the start-up’s products or services and the integration of innovation in a faster way than competitors, this can all be seen as valuable competitive advantages acquired through the collaboration with external start-ups. In the same line of thoughts, Hora et al. (2017, p. 430) state that the exploitation of innovative opportunities and the gains from disruptions can be assigned to competitive advantages as well. Correspondingly, Kyrgidou and Hughes (2010) characterize SE with the aim of developing competitive advantages. To find an answer to altering customer needs and simultaneously decreasing costs, this form of engagement between OEMs and external new ventures is therefore needed (Meyer & Marion, 2010; Vázquez Lucerga, 2018, p.130). However, a decrease in cost is not something that was especially highlighted during the conduction of our interviews, whereas being able to respond to changing customer needs could be distinguished both for the OEMs and the external start-ups. Additionally, the engagement in rapid product life cycles (Meyer & Marion, 2010) can be related to the wish of the adoption of speed stated by the CIIAs. Finally, entering new markets, co-developing, directing the corporate strategy at new customer segments and

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therefore profiting from the appropriate competitive advantages (Vázquez Lucerga, 2018, p. 97) can be directly associated with the start-ups products being valuable add-ons to the large corporations offerings, the possibility of serial implementations as well as the CIIAs focus on a wide international scope when it comes to the start-ups selection process. 5.2.7 Enable Start-ups Proof of Concept Surprisingly, moving away from the more egocentric motives, the interviewed CIIAs also mentioned their proactive willingness to provide start-ups with the corporate infrastructure (e.g. OEMs systems, processes and current product portfolio) to test-out their technologies, products and services as well as business models. Accordingly, the environmental context of the CIIAs help the start-ups discover whether or not, in a real-life context, their solutions would be sustainable and viable. These aspects could therefore be related to the key coopetitive motive of CSR, claiming to support SMEs and strengthen the economy (Hora et al., 2017, p. 419). Moreover, the physical space and an appropriate community integration could be additional key motives enabling start-ups to fully engage in the CIIA atmosphere and the according supporting systems, concurrently profiting from the different dynamics and synergies of the coopetition. To sum up, the aspects of reputation, recognition and the design of long-term collaborations gained in outmost importance through the review of our empirical findings, whereas the topics of funding and ownership were not as relevant as in the theoretical framework. Next to the access of a diverse assortment of resources (e.g. expertise, knowledge, etc.) therefore lies the acquaintance of long-term contracts (Leonard, 2014; Hochberg et al., 2015). While a long-term orientation, especially when it comes to innovation, is highly relevant (Vázquez Lucerga, 2018, p. 97), image and reputation and their dynamics, also have significant effects on the coopetitive relationship between CIIAs and external start-ups. Hora et al. (2017, p. 419) further supplement this by portraying reputation as being a key motive of coopetition, involving clients, suppliers and other stakeholders. In a broader scope, it could also be related to the proof of concept and induce a better access to funding due to an increase in credibility through the use of the CIIAs platform (see Pettersen & Tobiassen, 2012; Vázquez Lucerga, 2018, p. 103). Finally, the funding’s’ and ownership’s importance, however, was less emphasized in the real-life context. Especially when considering the fact that the interviewed CIIAs focused on more mature start-ups, the perspective of an initial funding or investment thereby became irrelevant. However, pitching to investors (Hochberg, 2016, p. 32-33) at CIIA organized workshops and internal events as well as buy-ins by the M&A departments, and therefore the possibility of being acquired by the OEMs (Kohler, 2016), are indeed existent possibilities. Thus, directly connected with growth and expansion, capital would indeed be needed in the internationalization phase. On the contrary, the retainment of talent and the development of inside entrepreneurial talent was not acknowledged in our empirical study (e.g. Becker & Gassmann, 2006b, p. 13; Vázquez Lucerga, 2018, p. 97). 5.3 The Coopetition between CIIAs and External Start-ups 5.3.1 Common Stakes From a general point of view, the relationships between CIIAs and external start-ups can be characterized through the major roles of innovation, new discoveries, organizational learning as well as the access to complementary resources, which justifies the fact that these relationships are built on a similar vision. Additionally, the need for competitive advantages, value co-creation and growth (Gertner & Mack, 2017, p. 2; Isabelle, 2013; Prajogo & Ahmed, 2006) can be connected to the shared vision or goal commonality, all

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representing key characteristics of the common stakes according to Laplume et al. (2008). However, the shared vision can also be highlighted by the fact that CIIAs and external start-ups both want to provide a common answer in this time of increased digitalization. Accordingly, orienting themselves at future prospects whilst taking a long-term perspective. Even if originally being based on a short time collaboration, the start-ups as well as the CIIAs stated their interests in developing fruitful long-term collaboration, after the first pilot phase. Correspondingly, if the product or service can be exploited on a long-term perspective by the OEM and both parties manifest their according interests, a long-term collaboration can be implemented. Furthermore, considering the organizational setting of CIIAs and start-ups a common culture, especially in regard to the newness and smallness, could be showcased. Hence, both can be defined as open innovation environments. This can be emphasized by the sharing of similar key aspects, as for example; flexibility, the importance of customer centricity, the focus on strategic partnerships and the common engagement in the proof of concept. With their relationship being mainly very personal, both the CIIAs and the start-ups highlight that a culture of trust, honesty and transparency is extremely important. CIIAs therefore talk openly about the possible use of the start-up’s products or services in the future, giving the start-up the chance to adjust and react. In addition, with the proof of concept being also possibly relatable to the goal commonality, customer centricity and the access to complementary resources, knowledge and markets (Vázquez Lucerga, 2018) as well as the ambition to co-develop products and services (Weiblen & Chesbrough, 2015) and the wish to make the most out of these time constrained relationships further define the existence of common goals. Besides, when it comes to equity ownership, buy-ins are a possibility but should not be considered as a main goal of these relationships. Correspondingly, while CIIA 2 states its interest in preserving the exclusivity over the start-up’s technologies, equity ownership is not an option for CIIAs, thus, being to time-intensive and taking the focus away from the cooperation and use cases. Additionally, the impossibility or inadequacy for CIIAs to invest in equity stakes of the start-ups therefore goes hand-in-hand with equity transactions not usually being related to CI, CIL or CA (Vázquez Lucerga, 2018, p. 20). In contrast, CVC’s main goal is primarily to invest in start-ups and engage in disruptive innovation through start-up ownership (Gompers & Lerner, 2000; Lerner, 2013), further arguing the choice of only choosing the three other main open innovation streams (e.g. CI, CIL and CA) for the constellation of CIIAs. In conclusion, the common threat could be related to the general survival of both CIIAs and start-ups. in light of the fast-paced and increasingly complex and uncertain business environments. 5.3.2 Power Relation In accordance with Pfeffer and Salancik (1978), the power relation between CIIAs and the external new businesses will now be discussed in light of the resource importance, resource control and the existence of resource alternatives. Resource Importance When it comes to the resource importance, Ibrahim (2016, p. 1765) expresses that for firms to be able to survive, an involvement in disruptive innovations is crucial. Respectively, OEMs show an increased necessity in collaborating with external start-ups to be able to stay innovative and gain competitive advantages. This therefore happens through the collection of complementary resources, hold by each of these players individually, or the detection of new resources (Leonard, 2014; Hochberg et al., 2015;

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Vázquez Lucerga, 2018). In addition, CIIAs being dependent from the parent OEM, the investment in such collaborations and the according implementation of innovations has to be agreed upon by the corporates, meaning that it has to be strategically valuable. Accordingly, when considering the collaboration with external start-ups another main advantage is the possibility of a cheap and fast serial implementation of new products and services. Furthermore, as corporates not only want to gain access to innovative competencies but also to a mindset and newness in general, the resource importance seems to be very high. On the contrary, the external start-ups profit from the valuable customer and partner networks as well as the physical space that is made available for them. Finally, in light of growth opportunities, the access to structure, the co-creation of value but also the possibility to test-out the BM, products or services, the attractiveness of CIIAs and its appropriate resources therefore significantly increases. Resource Control In consideration of the dependency of CIIAs to their funding OEM, the according resources should also be controlled by the OEMs. However, as long and highly administrative processes are prevailing in this context, the resource control would be very high. Thus, the CIIAs being individually responsible for most of their key activities and especially the managing of their own networks, in that case, the resources can be openly shared with the external start-ups and would not be overprotected, as for example the main corporate strategy. Additionally, as all the participants describe it as an environment of openness, the resource control in the CIIA context can be characterized as low. Similarly, the start-ups being very honest and open, with the only exception of details about their IP or main strategy, a high control of the resources is not an issue here either. With the CIIA 3 describing these relationships as a win-win situation, this therefore emphasizes the fact that both players enter these highly collaborative open innovation environments for a reason. Resource Alternatives The resource alternatives are highly dependent on the individual business model and the products or services of the start-ups but also the USP of the OEMs. Of course, the CIIAs always have the possibility to partner with another start-up, however their increased interest in long-term collaborations as well as the active engagement and search for high-potential relationships demonstrate a different approach. The start-ups operating in narrow or specialized fields (Hogenhuis et al., 2016) can be therefore be characterized as experts. Accordingly, start-ups nowadays are mostly operating in niche markets, where being small and knowledgeable constitute the base for success (Kupp et al., 2017, p. 47). In addition, start-ups can also provide the OEMs with future products or services, which are not available on the market yet. This can be closely linked to strategic entrepreneurship where companies are involved in both exploration and exploitation. Correspondingly, large firms are better in exploiting key competences while start-ups are better in the exploration of innovations (see Ireland & Webb, 2007). To conclude, and as previously stated in our theoretical framework, the power relation between CIIAs and external start-ups, especially in light of both being small and ‘feeling’ independent (Birkinshaw, 2005; Hora et al., 2017, p. 411), stay weak, whereas the common stakes remain very strong.

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5.3.3 Management of the Coopetition The management of the coopetitive relationship between CIIAs and external start-ups can be categorized into the three following parts: partner selection, organizational setting and governance mechanisms. Accordingly, these will be further detailed below. Partner Selection While Hora et al. (2017, p. 419) outline that the partner selection includes personal contacts, networking and a common vision while requiring a website, trust and sympathy, our empirical findings prove that all these characteristics can be suitably backed up. The CIIAs key motive to enable the proof of concept for start-ups, but also the overall exchange of complementary resources can therefore be closely related to the existence of a common vision. In addition, while the corporate fit is less important, particularly in regard of the time shortness of the collaborations, the similar visions of CIIAs and start-ups especially in regard to industry specific innovations and their common organizational features (e.g. smallness, young teams, the emphasis on the importance of personal relationships, flexibility and adaptability) could re-emphasize the significance of this corporate fit. Moreover, CIIAs are principally scouting for start-ups that are in a higher maturity stage. Accordingly, the start-up should have a suitable prototype as well as some experience in applying the technology to a real usage. Whereas, being experts in their fields and innovating not only in the perspective of their products or services but also their business models (Hogenhuis et al., 2016; Latouche, 2019, p. 40) add great supplementary features to the selection process. Finally, some legal and ethical considerations should be contemplated as well. Organizational Setting With start-ups especially interested in the acquaintance of feedback as well as further developing and ameliorating their products or services, trust and transparency are regarded as very important in these relationships. Equivalently, as trust and honesty go hand-in-hand (Hora et al., 2017, p. 419), a collaboration with start-ups is immensely fruitful in this regard, as being open and honest are one of the start-ups main characteristics. In view of Waguespack and Fleming (2009), the CIIAs are therefore considered as open innovation landscapes as well as a neutral platform. Hence, a cultural clash between the start-up and the OEM culture can be observed, when CIIAs have to rely on the administrative or strategic processes of the large corporation. Furthermore, throughout the interviews the importance of the geographical proximity was highlighted by both CIIAs and the external start-ups. This goes along with Moultrie et al. (2007) emphasizing on the significance of the physical space together with the feeling of belonging to a specific community. In conclusion, the CIIAs environment could also be characterized as a safety and support net, whereby start-ups can test-out their products or services without facing the real-life major risks or challenges. Governance Mechanisms First of all, it has to be stated that the management of these relationships is highly dependent on the existence of pilot projects or use cases, made available through the OEMs’ business units. The governance mechanisms are thereby essentially concerned with contracts, NDAs and the protection of autonomy (Hora et al., 2017, p. 419). Correspondingly, some of our respondents see it as a contractual relationship, whereby others do not define it as such. Based on our empirical findings, the designations as a customer-supplier or venture-client approach, prove that these are more project-based and contract-based relationships. Thus, a preference for strategic or exclusive partnerships

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can be noticed. Mostly presented as a customer-supplier relationship, however, where the start-up is the supplier and the CIIA the customer, these relationships are very personal and involve only a few standardized processes. Accordingly, NDAs are signed, whereas the IP mostly stays with the start-ups. The protection of autonomy, thence, can be related to the sharing of office locations, customers or other strategic partners between CIIAs and the external start-ups, directly affecting the preservation of autonomy. Moreover, with its short lifespan, the collaboration between CIIAs and external start-ups aims at the possible serial implementation of the co-created goods or services as well as the long-term exclusive partnerships, both in agreement with the outcome-orientation determined by Meyer and Marion (2010). In addition, whereas guidance can be seen as a supporting activity of the CIIA programs, an increase in the start-up’s maturity can induce a decrease in the attractiveness of guidance or mentoring. Accordingly, guidance is only accessed when needed while start-ups also have the possibility to work remotely. Lastly, for the CIIA to be able to appropriately support the start-ups, the managers need to display suitable social, technical and sector-specific expertise (Branstad & Saetre, 2016, p. 254). Howbeit, as these programs seem to be newly emerged, the technical and industry specific expertise can solely be handed out through the collaboration with the company’s internal departments and not the CIIAs themselves. 5.3.4 Implications of the Coopetition When it comes to the implications of coopetition in light of the CIIA and external start-up relationship, possible risks include cultural clashes, unbalanced relationships, diverse expectations (Hora et al., 2017, p. 419), uncertainties, obsolescence, organizational changes in regard of the increasing digitalization (Cooper, 2014), unexperienced management (Birkinshaw, 2005) or unsettled promises. While Tötterman & Sten (2005, p. 503) further describe the participant diversity in CIIA programs as affecting the collaboration, our empirical findings reveal that start-ups appreciate tenant diversity and even relate it to more trust and an increased openness. Appropriately, the start-ups consider the other participants as strategic partners instead of competitors, which would only happen in the case of their product or service offerings being too similar. The CIIA making the appropriate choices in this regard therefore counteracts the possible decrease in trust as well as the increase in the concern of non-confidentiality, deeply affecting the sharing community (Cooper et al., 2012). However, generally speaking, the pressures between value creation and value capture represent a challenge for the OEM managers overall (Ritala & Hurmelinna-Laukkanen, 2009). Moreover, opportunism represents another major challenge that remains in these relationships. Directly related to the power difference (Tidström, 2014), start-ups are indeed more vulnerable and have fewer bargaining strengths in comparison to large corporations (Chung 2012; De Rond & Bouchikhi, 2004; Lechner et al. 2016). Accordingly, the possible opportunistic behaviours of the business units were connected with the aim to improve the OEM’s own products or services as well as the possibility of the OEM to acquire knowledge regarding a specific product or services, with the goal to develop or imitate it in a later stage. This validates Fernandez et al. (2014)’s insight, considering corporate opportunism as being strictly related to product imitations and the acquaintance of knowledge. Additionally, and according to our theoretical framework only, start-ups being less involved in the coopetitive relationship than corporates due to time and competences constraints (Morris et al., 2007a), showcase an increase in dependency towards the OEM (Ketchen et al., 2007) and therefore endure the same organizational complexities (Gnyawali & Park, 2009, p. 312). However, start-ups facing

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the same structural complexities as large corporations was displayed by one of the CIIAs. In conclusion, reputational damages can also be seen as a risk that can incur for the OEMs but also the external start-ups. Even though, the CIIA manage their own activities and the platform as a whole, they are still not independent from the parent OEM and thereby not protected from the corporation’s complexities as Kohler (2016) would outline it. Correspondingly, by collaborating with a certain CIIA, under the hat of the OEM, the start-up’s choice can therefore negatively affect future investment opportunities. Whereas, CIIAs could suffer from reputational damages due to unprofessional behaviours or unsuccessful collaborations with external start-ups. In addition, uncertainty in combination with the loss of resources can similarly lead to negative reputational consequences (Quintana-Garcia & Benavides-Velasco, 2004). To conclude, while the benefits of this coopetitive relationship are closely related to the key motives, a further analysis of the main benefits is therefore not necessary in this regard. 5.4 Proposed Framework The following framework (Figure 11) illustrates a revised model of our conceptual framework, including new insights, corrections and further assumptions.

Figure 11: The Coopetitive Dynamics Between OEMs and External Start-ups in the Context of Corporate Open Innovation Strategies

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Similar to our first conceptual framework, the predominance of collaboration combined with the existence of competitional tensions sets the overall frame for the coopetitive relationship between OEMs and external start-ups through the context of CIIAs. Hence, influencing the coopetition between these two actors through the balance between common stakes and power relations (see Akpinar & Vincze, 2016, p. 56). However, it can clearly be noted that the importance of the common stakes is highly prevailing in this context, whereas the power relations play a more minor role when it comes to the overall influences on this collaboration-dominant coopetition and respectively its management. Appropriately, the management of this coopetition therefore includes the balance between a constant exploration and exploitation of opportunities with the aim of developing efficient strategic entrepreneurship processes (see Ireland & Webb, 2007, p. 58). Likewise, the external start-up and CIIA’s key motives as well as the implications of this coopetitive relationship, all have consequences affecting the management of these relationships. While, the CIIAs are clearly dependent from their OEMs, they still represent an intermediary or gate-keeper between the large corporations and the start-up ecosystem. This part of the framework can therefore be related to the advocate model, described by Wolcott and Lippitz (2007, p.78) as the existence of an advocate organizations, also defined as an innovation expert, promoting corporate entrepreneurship through the support of the company’s internal departments. Correspondingly, the CIIAs motives therefore belong to the CIIA culture individually, while its structure and setting is given by the according OEM. Furthermore, when it comes to the key motives of the external start-ups, it can be highlighted that while growth and access kept their main positions, the aspects of co-creation and co-development and the proof of concept gained in significance. Appropriately, credibility and funding were transformed or eliminated respectively. On the other hand, for the CIIAs, a combination between innovation and new markets created the key motive ‘Access’, whereas the organizational culture and talent were replaced by the organizational learning and competitive advantages. In addition, as for the external start-ups the co-creation and co-development as well as the proof of concept proved to be strikingly relevant. Equivalently, the implications of the coopetition, categorized by benefits and risk, were adjusted and highlighted when of outmost importance. Finally, based on our focus on non-equity corporate open innovation strategies and the fact that the categories of funding and ownership were less emphasized in our empirical findings, we choose to omit funding as a key motive in the CIIA and external start-up relationship. To conclude, this framework is based on our previous conceptual framework as well as empirical findings and should be regarded as a combination of both our theoretical contributions and empirical study. This framework thence highlighting the main aspects resulting out of the coopetitive relationship between CIIAs and external start-ups, should also be seen as an answer to both our research questions and a framework summarizing the key aspects of our research purpose, clearly leading to the last chapter of this master thesis.

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6 Conclusion This concluding chapter will answer our research questions by highlighting our most important discoveries and conclusions. Besides this, the theoretical, managerial and societal contributions of our study will be drawn. Lastly, we will present the limitations of our study as well as suggestions for future research. 6.1 Research Findings The main purpose of our research was to elaborate the understanding of the key aspects and coopetitive transformation of the relationship between OEMs and external start-ups in the light of the corporate open innovation strategies. With the combination of our empirical data and theoretical framework, we therefore contributed to the understanding as well as illustrated the relevant dynamics in the coopetitive relationship between OEMs’ CIIAs and external start-ups, summarized in our final proposed framework. Additionally, in light of our research questions aimed at the key motives driving the relationships between OEMs and external start-ups as well as the definition of coopetition in the context of CIIAs, it has to be stated that through the discussion of the key drivers but also the management and the implications of this coopetitive relationship, our two research questions have found suitable answers. Appropriately, this also involves the When sub question, which can be precisely related to the key motives driving the relationship between OEMs and external start-ups leading to a coopetitive relationship between CIIAs and external start-ups. Respectively, our key findings include that the OEMs’ motive to partner with external start-ups can be showcased by the access to complementary external knowledge and resources but also the wish to co-create and co-develop products and services as well as offer the possibility of a proof of concept. Moreover, our empirical findings, showed that start-ups and CIIAs can indeed engage in coopetitive relationships, further determined as a cooperation-dominant coopetition. The aim of corporates to engage in these coopetitive relationships is thereby mainly justified by bringing fast implementations and innovation capabilities back into the company and therefore gaining competitive advantages. The start-ups key motives, on the other hand, are to access an established structure and field-related expertise, test out their business models, products or services, accelerate their growth as well as co-create and co-develop. However, it is interesting to note that we found out that some key motives, that were relevant according to our theoretical framework, lost in importance when related to the empirical findings, as for example, the access to funding for start-ups or the retainment and acquisition of talent for corporates. Additionally, the existence of CIIAs was proven by our empirical findings and then further elaborated in the discussion. Consequently, it was stated that our collected empirical data could be related to the three-step process elaborated on the base of Vázquez Lucerga’s (2018, p. 114-115) model for integrated open innovation. At last, we have found out that OEM partner with external start-ups through their CIIA platforms, whereby the relationship can mostly be characterized by a customer-supplier relationship. In addition, the CIIAs can thereby be seen as gate keepers or intermediaries between the organizational culture of the corporate and the start-up ecosystem. Nonetheless, whereas the start-ups could see the possibility of competition between CIIAs and start-ups, especially in the aspect of corporate opportunism, the CIIAs demonstrated an unclear understanding for this possibility. Respectively, CIIAs are more efficient in implementing the innovations and the corresponding new approaches back into the larger corporations, which can be connected to their small entity mindset and

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their better way to cope with external start-ups. In conclusion, some risks and challenges prevail in these relationships, not only based on cultural clashes, corporate opportunism, reputational implications and the diverse organizational expectations but also the fast-paced context in which both coopete. 6.2 Theoretical Contributions In this new area of digitalization and rapid innovations, the need for automotive manufacturers to cope with their innovation capabilities can therefore be counterbalanced through the adoption of corporate open innovation strategies. Accordingly, the OEMs seek to partner with external start-ups through different CIIAs streams which can be related back to lack of research concerning the heterogeneity in incubation models (Bruneel et al., 2012; Hackett & Dilts, 2004). Based on Vázquez Lucerga’s (2018) model, we therefore further highlighted their similarities and promoted the potential that these streams have when combined into one. Respectively, we contributed in bridging the gap for the understanding of the relational aspects between external start-ups and OEMs in the context of corporate IIAs (see Roig-Tierno et al., 2018, p. 380). Using the CIIAs approach can therefore be seen as a resourceful strategy when OEMs want to engage in activities outside their traditional corporate boundaries and try to respond to the challenges of this new digital area (Juell-Skielse & Hjalmarsson, 2017, p. 4) through coopetition. Moreover, our final framework highlighted the key motives behind the relationship between CIIAs and external start-ups as well as the coopetitive dynamics influencing its management and implications. This therefore not only contributed to the lack of research regarding coopetition and start-ups (Roig-Tierno et al., 2018, p. 380) but also its combination with CIs and CAs (Drain, 2015, p. 12). Finally, by studying the CIIAs overall characteristics and the understanding of their internal mechanisms, in the context of coopetition between OEMs and external start-ups, our theoretical and empirical findings can contribute to the literatures of coopetition, corporate innovation and corporate entrepreneurship. 6.3 Managerial Implications While the explanation of the key aspects of CIIAs (e.g. motives, implications and management) and its proof of existence can help managers and entrepreneurs better understand the different dynamics present in their relationships, the combination of CI, CA, CIL can be seen as a way for large corporations, and especially OEMs in the automotive industry, to further increase competitive advantages in this fast-paced, highly dynamic new area of digitalization. Additionally, this will expand managers awareness in light of the possible key drivers involved and support the overall management of these coopetitive relationships. Considering the survival of the OEMs in this landscape of uncertainty and fast-changes, gaining access to knowledge about the successful management of the coopetition with external start-ups becomes therefore increasingly relevant. Furthermore, the three stages of the CIIA can be seen as an attempt to help managers and corporates in the implementation of these CIIAs, giving both OEMs and external start-ups the chance to focus primarily on the outcome of these relationships. In the end, throughout the conduction of our interviews, managers and entrepreneurs have portrayed great enthusiasm in the topic discussions, while some even showed an interest in the findings of the research. Hence, we trust that our research findings will be used by managers as a guide for the effective management of the relationships.

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6.4 Societal Implications When it comes to the possible societal implications, these relationships not only influence the economic growth of entire industries and countries but the CIIAs also provide a platform, where corporates can interact with external start-ups, co-innovate or co-develop value, share knowledge and expertise as well as engage in innovation and growth activities that will have an impact on the society and its stakeholders as a whole. Accordingly, it could also be seen as a mean for large organizations to boost entrepreneurship and innovation, encourage successful individual entrepreneurs and support start-ups to showcase their innovations and successes, thus, bringing valuable contributions to society. In addition, customers, one the main common stakeholder of both the OEMs and the external start-ups, could benefit from the novel innovations that these relationships bring, especially in regard to their individualized needs. Employees of both parties, on the other hand, could further develop their knowledge, competences and skills through the engagement in these learning approaches. Whereas start-ups get access to beneficial strategic partnerships, also including possible cooperation among themselves, directly affecting their hopes for success, OEMs can profit from an increase in productivity and innovative capabilities, appropriately transferring the benefits to all their involved stakeholders. This can be further related to the Input-Process-Output model of SE by Hitt et al. (2011, p. 58), illustrating that this kind of strategic entrepreneurship approach will lead to the creation of wealth and other benefits, including societal, organizational and individual benefits. Finally, the relationship between CIIAs and external start-ups defines the setting for the development of corporate open innovation strategies where large firms and external start-ups can integrate creativity, develop more innovative products and services, expand their network in their given industries and even further discover new sectors and opportunities, affecting not only the country’s economy but also the expanding interconnections between individuals and innovations. Additionally, this further fosters the hope of an increase in good and successful businesses, portraying purposes concerned with sustainability or ethical innovations. Similarly, coopetition benefits society in the way that firms co-create valuable products and services together, focussing on the complementarity of resources instead of the acquaintance of competitive advantages through the exclusive control over significant resources. To conclude, the co-creation of knowledge present throughout the whole collaborative process between CIIAs and external start-ups not only fruitfully affects economic growth (Karatas-Ozkan et al., 2005, p. 42) but also benefits the general availability and sharing of knowledge. 6.5 Limitations and Future Research First and foremost, our study has been limited by time constraints, and in this regard especially when it comes to our empirical study, this has limited us from interviewing more respondents. Thus, resulting in the unavailability to bring further perspectives into our research. Correspondingly, as the CIIAs are indeed small entities, dependent of large corporations in the German automotive industry, it was especially complex to set-up the first contacts with our participants. Secondly, as a newly emerged topic, only a few researchers studied the possibility to merge these new open innovation strategies into one, while our empirical findings concerned with the proof of existence of CIIAs are equally restricted in number. Accordingly, even if our empirical findings show that these three concepts could be merged, further research should be done on how these single entities can individually contribute to the successful implementation of CIIAs. In addition, as we focused more on the relationship that these CIIAS have with external start-ups, more

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insights concerning the actual structure and context of the CIIAs could be further studied. However, with the coopetitive relationships between OEMs and external start-ups as a foundation only the coopetitive dynamics between CIIAs and external start-ups had to be carefully displayed by the combination of our theoretical framework and our empirical findings. To give an appropriate answer to our research questions, we therefore had to develop our own conceptual framework and suitably revised it in the discussion chapter of our thesis. Moreover, this study was also limited by the fact that we focussed only on the German automotive industry and that two out of the three CIIAs were actually related to the same parent OEM. Additionally, CIIA 3 could not be analysed in regard to its detailed relationship with external start-ups, as no according start-ups were interviewed. Correspondingly, further research should include a larger sample of participants as well as the opinions of the managers of the internal business units and other employees, directly involved in the pilot projects or use cases and consider relating these theories to another industry or sector to further confirm its transferability and validity. To conclude, as these relationships are indeed newly emerged, the main purpose of our study was not to determine whether these are successful or productive. Therefore, we would suggest a quantitative or longitudinal study to be done, testing the success rate of these relationships between the OEMs and external start-ups in the context of CIIAs, simultaneously broadening the scope of the research as a whole.

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8 Appendices 8.1 APPENDIX 1.

INTERVIEW GUIDELINE CIIAs

INTERVIEW DETAILS: Date: Time: Interviewer(s): Interviewee:

Name: Job Title: Organization:

OPENING REMARKS. INTRODUCTION TO THE RESEARCH TOPIC: This master thesis is mainly concerned with analysing and understanding the relationship between large international automotive corporations and external start-ups in the present highly dynamic and innovative ecosystem. Accordingly, corporate incubators, accelerators and innovation labs (in short CIIAs), as a new form of enterprise and start-up cooperation, will be further investigated. The purpose of this empirical study is therefore to highlight the main drivers and motives of the collaboration as well as discover the opportunities, challenges and risks involved in these relationships. In the end, the empirical study should help us establish if competitional tensions and therefore coopetition exists in the relationship between CIIAs and external start-ups. INTERVIEW QUESTIONS:

PART I - Role and Relationship to the Research Topic

Aim: Ability to rate the knowledge level and role adequacy in relation to our research topic

1. Could you shortly describe your role as well as the involved responsibilities that come with it?

2. How would you rate your knowledge in regard to our research topic? Would you identify yourself as an expert in this field?

PART II - Company Details Aim: Proof of Existence of CIIAs and illustration of the defining key aspects of CIIAs

3. Could you shortly describe the purpose of your organization as well as its main goals and objectives?

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Sub Questions: • What services or products do you offer? • Is your organization focused on a specific field within the

automotive industry?

4. Can you identify your organization as either a corporate incubator, accelerator or innovation lab? And if yes, which one or which ones?

5. Do you see your organization as an independent business entity or is it directly related to a parent company?

6. How would you describe your organizational environment? Sub Questions:

• Is it Entrepreneurial? Flexible? Innovative? Agile? People-Oriented? Collaboration Oriented?

7. How does innovation take place in your organizational context?

Sub Questions: • Is it open or closed innovation?

PART III - Selection Process & Collaboration Methods

Aim: Showcase the internal mechanisms of CIIAs as well as gain general insights about the relationship between CIIAs and external start-ups and the management of these collaborations

8. What kind of start-ups are you looking to partner with and how do you select them?

Sub Questions: • Internal or External? • Products or Services? • Focused on specific fields within the automotive industry?

9. Could you explain your start-up collaboration methods to us as well as how it

takes place? Sub Questions:

• Standardized or Individualized? • Are buy-ins or corporate venturing a possibility or a main part of

the collaboration process? • Do you provide guidance & resources and what kind? • Do you share your network (appropriate contact persons) with

the start-ups? Are there any restrictions involved? • Do you provide funding and if yes, what terms are used?

PART IV - The CIIAs’ Relationship with External Start-ups

Aim: In-depths analysis of the key drivers of the relationship between CIIAs and external start-ups, the management of these relationships as well as some possible implications in the form of complementary benefits, advantages and disadvantages

10. In general, how would you describe your relationship with your partnering start-ups?

11. Would you define these relationships as successful? Sub Questions:

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• How do you define success? • Higher Value Creation?

12. What are the key motives and goals driving your relationship with start-ups? 13. How do you create & capture value with and within these relationships? 14. What do start-ups bring to the relationship that you do not have? And vice

versa? 15. To conclude, could you shortly name the main advantages and possible

disadvantages of your relationship with start-ups?

PART V – Competitional Tensions and a Coopeting Relationship?

Aim: Further elaborate on the implications of this relationship through the presence of possible risks and challenges characterizing competitional tensions and therefore justifying the existence of coopetition between OEMs and external start-ups in the context of CIIAs

16. Are there any risks and challenges involved in these kinds of collaborations and relationships?

Sub Questions: • Exits? Failure? Competition? Stop of Collaboration?

17. Do you share stakeholders, products or services with your partnering start-ups? 18. Who does the ownership of the intellectual property belong to? 19. Would you define yourself as completely transparent in regard to your

partnership with start-ups? Sub Questions:

• How do you manage the balance between knowledge sharing and knowledge protection?

20. And finally, how does trust work in these specific contexts?

ENDING REMARKS.

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8.2 APPENDIX 2.

INTERVIEW GUIDELINE START-UPS

INTERVIEW DETAILS: Date: Time: Interviewer(s): Interviewee:

Name: Job Title: Organization:

OPENING REMARKS. INTRODUCTION TO THE RESEARCH TOPIC: This master thesis is mainly concerned with analysing and understanding the relationship between large international automotive corporations and external start-ups in the present highly dynamic and innovative ecosystem. Accordingly, corporate incubators, accelerators and innovation labs (in short CIIAs), as a new form of enterprise and start-up cooperation, will be further investigated. The purpose of this empirical study is therefore to highlight the main drivers and motives of the collaboration as well as discover the opportunities, challenges and risks involved in these relationships. In the end, the empirical study should help us establish if competitional tensions and therefore coopetition exists in the relationship between CIIAs and external start-ups. INTERVIEW QUESTIONS:

PART I - Role and Relationship to the Research Topic

Aim: Ability to rate the knowledge level and role adequacy in relation to our research topic

1. Could you shortly describe your role as well as the involved responsibilities that come with it?

2. How would you rate your knowledge in regard to our research topic?

PART II - Company Details Aim: Collection of additional insights regarding the field of activity, the organizational culture, the purpose and the innovative capabilities of the external start-up partnering with the CIIAs. Accordingly, the base for the possible key motives of their relationships.

3. What services or products do you offer exactly? 4. Is your organization focused on a specific field within the automotive industry? 5. Could you shortly describe the main purpose of your start-up as well as its

main goals and objectives? 6. How would you describe your organizational environment?

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Sub Questions: • Is it Entrepreneurial? Flexible? Innovative? Agile?

7. How does innovation take place in your organizational context?

Sub Questions: • Is it open or closed innovation? • What kind of innovation (e.g. product/service, technological

process, organizational)

PART III - Selection Process & Collaboration Methods

Aim: Showcase the internal mechanisms of CIIAs as well as gain general insights about the relationship between CIIAs and external start-ups and the management of these collaborations

8. What kind of CIIAs are you looking to partner with and how do you choose them?

Sub Questions: • Corporate or other kinds (e.g. university, economic development,

private incubator) ? • How do you get in contact with them? • Specific Products or Services? • Focused on specific fields within the automotive industry? • Importance of Corporate Fit (e.g. culture/values)? • Specific Aspects or Criteria that are important in this context?

9. Could you explain your CIIA collaboration methods to us as well as how it

takes place? Sub Questions:

• Standardized or Individualized? In-house collaboration or not? Project-based?

• Are buy-ins a possibility or a main part of the collaboration process?

• Do you get guidance & resources (e.g. knowledge, expertise) and what kind?

• Do CIIAs share their network (appropriate contact persons) with you? Are there any restrictions involved?

• Where you provided with funding and if yes, what terms are used?

PART IV - The External Start-ups’ Relationship with CIIAs

Aim: In-depths analysis of the key drivers of the relationship between CIIAs and external start-ups, the management of these relationships as well as some possible implications in the form of complementary benefits, advantages and disadvantages

10. In general, how would you describe your relationship with your partnering CIIAs?

Sub Questions: • Professional or Personal? • And in regard to Respect, Communication, Teamwork? • Do you still have contact with them?

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11. Would you define these relationships as successful?

Sub Questions: • How do you define success?

12. How did you create & capture value with and within these relationships? 13. What are the key motives and goals driving your relationship with CIIAs? And

vice versa? 14. What do CIIAs bring to the relationship that you do not have? And vice versa? 15. To conclude, could you shortly name the main advantages and possible

disadvantages of your relationship with CIIAs?

PART V – Competitional Tensions and a Coopeting Relationship?

Aim: Further elaborate on the implications of this relationship through the presence of possible risks and challenges characterizing competitional tensions and therefore justifying the existence of coopetition between OEMs and external start-ups in the context of CIIAs

16. Are there any risks and challenges involved in these kinds of collaborations and relationships?

Sub Questions: • Exits? Failure? Competition? Stop of Collaboration?

17. Do you share stakeholders, products or services with your partnering CIIAs? 18. Who does the ownership of the intellectual property belong to? 19. Would you define yourself as completely transparent in regard to your

partnership with CIIAs? And how would you rate the transparency of the CIIA in your regard?

Sub Questions: • How do you manage the balance between knowledge sharing and

knowledge protection? Are there any limitations involved?

20. And finally, how does trust work in these specific contexts? ENDING REMARKS.

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8.3 APPENDIX 3.

Documents

Open Innovation Strategies: A new pivot for OEM and Start ...1330390/FULLTEXT01.pdf · MVP: Minimum Viable Product NDA: Non-Disclosure Agreement NPD: New Product Development OEM: