Strategic Partnership: Facilitating Value for Start-ups

Abstract

Strategic partnership between incumbents (corporation) and start-ups are receiving increased attention from several prospects. Incumbents possess resources that start-ups aspire for, while start-ups have agility and novel ideas that incumbent’s value. Collaboration between two brings immense opportunities for each other when it is harnessed properly. Start-ups benefit incumbents with innovation of emerging technologies whereas partnership with corporations offer start-ups a good opportunity with exploring options for developing their business. Start-ups are considered as full of risk appetite for the prospect of changing industry by creating something new but oftentimes have roadblocks due to lack of resources. Therefore, the aim of this paper is to investigate how strategic partnership with incumbent enhances value for start-ups. This paper demonstrates extensive explanation from previous research and theories to base the foundation of research objective. For theoretical framework, resource-based view is used to understand the motivation of start-ups for alliancing with incumbent and knowledge-based view is utilized for further demonstration of value enhancement through knowledge creation theory. Propositions are made to guide the research question and to analyse the findings. The study employs single case study with embedded with a multiple unit of analysis of deductive approach. The nature of this case study is to explain cornerstone of start-up’s alliance with incumbent with necessary connections. It is a qualitative case study conducted on six start-ups in Norway for collecting primary data. Perspectives of incumbents and experts associated with partnership management also are taken from interviews to understand the base of strategic partnership between start-ups and corporation. The analysis shows that start-ups are motivated to form competency-oriented partnership with large firms both for learning and gaining complementary resources. Most of the start-ups entered partnership at their early stage to grow faster in the market. Competency of start-up’s in learning and combining complementary resources is enhanced when it is harnessed by the sharing and creating knowledge between both partners. Lastly, the study also points out some limitations and important aspects for future research that need to be verified for further clarifications of findings.