Disruptive Coopetition: How Start-Ups Disrupt Industries in Coopetitive Partnerships with Incumbent Firms

Disruptive start-ups empowered by digitization are increasingly rendering business models of incumbent firms obsolete. At the same time, these start-ups face significant challenges as a result of the fast-paced and uncertain commercial environment. Instead of competing with each other, disruptive start-ups can engage in coopetitive partnerships with incumbent companies to collaboratively diffuse innovation. Coopetition constitutes a phenomenon characterized by simultaneous cooperation and competition. While the majority of previous research has focused on coopetition among equally large firms, this thesis combines the fields of disruptive innovation theory and coopetition by concentrating on partnerships between disruptive start-ups and incumbents. This qualitative, multiple-case study is based on four start-ups in the energy industry, which develop a disruptive, blockchain-based platform and which are engaged in partnerships with incumbent firms threatened to be disrupted. The study draws on both primary and secondary data in form of interviews, whitepapers and other documents published by the case companies. The data analysis is conducted in four steps: within-case analysis, cross-case analysis, identification of patterns and creation of framework. The resulting theoretical framework takes previous research as well as novel empirical findings into account and presents a holistic basis for coopetition between start-ups and incumbents. Besides the theoretical framework, the main findings of the study are threefold. First, an intertemporal tension in the realization of benefits becomes evident, as the start-ups are able to capture value from the coopetition before the established firms can. Second, a model emerges which shows that external and internal factors significantly influence the balance of cooperative and competitive forces. External factors include changes in the commercial environment, whereas internal factors summarize the perceived marginal benefits of the partnership. Third, the study finds that the strategies of the case companies envisage a two-phase commercialization strategy, with a sustaining innovation in the first phase transitioning to a disruptive innovation in the second phase. Synthesizing these key findings, the study concludes that coopetition between start-ups and incumbents constitutes a distinct phenomenon and demands a finer-grained definition. Hence, the term “heterogeneous coopetition” is introduced to offer a pathway for future research. From a managerial perspective, this study provides insight into an effective way for start-ups to diffuse disruptive innovations as well as for incumbent companies to react to disruptive threats. For both parties, the results of this research amplify recommendations how value creation and appropriation processes in heterogeneous coopetitive partnerships can be fostered. As the study takes place in the energy industry, the empirical findings and managerial implications of this thesis are generalizable for environments with similar characteristics. Replication of the underlying methodological approach of this study in other environments is required to substantiate or to repudiate the empirical findings and to enlarge their generalizability. Furthermore, since research in the conjunction of disruptive innovation theory and coopetition is still scarce, considering other constellations of dissimilar coopetition partners represents potential to bolster the newly defined term of heterogeneous partnerships.