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New Business Models

and Ambidextrous

Strategies

MASTER THESIS WITHIN: Business Administration NUMBER OF CREDITS: 30 ECTS

PROGRAMME OF STUDY: Digital Business AUTHORS: José Humberto Cantú Torres, Marcel Dolch JÖNKÖPING May 2021

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Master Thesis in Business Administration

Title: New Business Models and Ambidextrous Strategies - The Automotive Industry in a State of Flux

Authors: José Humberto Cantú Torres, Marcel Dolch Tutor: Henry Nelson Lopez Vega

Date: 2021-05-24

Key terms: Ambidexterity, Business Model Innovation, Exploration, Exploitation, Automotive Industry

__________________________________________________________________________________

Abstract

Background Given the physical nature of the product, the automotive industry remains as one

of the few industries yet to be digitized. And the transformation is happening mostly through the innovation of the Business Model. The industry is seeing a threat of new entrants from outside of the traditional automotive industry. Moreover, established players are considering new business models to serve the changing market. This is where the balance of exploiting current business models and exploring new ones comes into play.

Purpose The purpose of our study is to present a framework showing how an ambidextrous

approach helps in the challenge of innovating a business model or introduce new business models in the automotive industry. Moreover, we will provide insights into the challenges the business model innovation provides to this industry and propose potential implications for managers. The research will be based on the theory of business model innovation, ambidextrous organizations, and ambidexterity in business models.

Method To achieve the purpose of the study, semi-structured interviews were conducted,

followed by a grounded analysis. For this study, a literature review was used that generated a theoretical framework.

Conclusion Our results and analysis of the interviews are presented in a framework that is

based on three identified concepts: Customer and Market, Structures within the Organization, and Ability to Innovate. These three are interrelated in our framework and help us answer the initial research question proposed.

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Table of Contents

1 INTRODUCTION ... 1

1.1 BACKGROUND ... 1

1.2 PROBLEM DISCUSSION ... 3

1.3 PURPOSE OF THE STUDY ... 3

1.4 OUTLINE OF THE STUDY ... 4

2 THEORETICAL FRAMEWORK ... 5

2.1 INTRODUCTION ... 5

2.2 BUSINESS MODEL INNOVATION ... 5

2.2.1 The New Strategies ... 8

2.2.2 Innovation of Business Models ... 11

2.3 AMBIDEXTERITY ... 13

2.3.1 Forms of ambidexterity ... 16

2.3.2 Ambidextrous Organizations ... 17

2.4 BUSINESS MODEL AMBIDEXTERITY ... 18

2.4.1 Strategies to adapt new Business Models ... 19

2.4.2 Ambidexterity and New Business Models ... 20

3 METHODOLOGY ... 22

3.1 RESEARCH PHILOSOPHY ... 22

3.2 RESEARCH DESIGN AND STRATEGY ... 23

3.3 DATA COLLECTION ... 24

3.3.1 Sampling ... 24

3.3.2 Data Collection Technique ... 26

3.3.3 Interview Design ... 29

3.3.4 Data Analysis ... 31

3.3.5 Research Quality ... 34

3.4 ETHICAL CONSIDERATIONS ... 36

4 EMPIRICAL FINDINGS ... 39

4.1 CUSTOMER AND MARKET ... 42

4.1.1 Customer Centricity ... 42

4.1.2 Perception of the Car ... 43

4.1.3 Customer Interface ... 44

4.2 STRUCTURES WITHIN THE ORGANIZATION ... 45

4.2.1 Agile Management Structures ... 45

4.2.2 Importance of Existing Assets ... 47

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4.3 ABILITY TO INNOVATE ... 48

4.3.1 Independent Business Units ... 49

4.3.2 Common Vision and Leadership ... 50

4.3.3 Collaboration and Ecosystems ... 51

5 ANALYSIS ... 54

5.1 CUSTOMER AND MARKET ... 54

5.2 STRUCTURES WITHIN THE ORGANIZATION ... 56

5.3 ABILITY TO INNOVATE ... 59

5.4 AMBIDEXTERITY AND BUSINESS MODEL INNOVATION IN THE AUTOMOTIVE INDUSTRY ... 62

6 CONCLUSIONS ... 64

6.1 CONCLUSION ... 64

6.2 DISCUSSION ... 64

6.2.1 Theoretical Implications ... 65

6.2.2 Practical Implications ... 65

6.2.3 Limitations and Future Research ... 66

REFERENCES ... 68

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FIGURES

FIGURE 1-BUSINESS MODEL CANVAS ... 6

FIGURE 2-BUSINESS STRATEGY AND BUSINESS MODEL ACCORDING TO STÄHLER (2017) ... 7

FIGURE 3-RESEARCH APPROACH ... 22

FIGURE 4–THE SEVEN STEPS OF GROUNDED ANALYSIS ... 32

FIGURE 5-CODE-TO-THEORY MODEL ... 34

FIGURE 6-CONNECTION OF THE IDENTIFIED CONCEPTS ... 39

FIGURE 7-IDENTIFIED FRAMEWORK ... 63

TABLES TABLE 1-DEFINITIONS OF BUSINESS MODEL ... 2

TABLE 2-INTERVIEWEES ... 27

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1

Introduction

______________________________________________________________________ The purpose of the first chapter is to introduce the reader to what will be covered in the study. Here, the background, problem, and purpose of this study are being presented. Furthermore, the research question of this study is presented. The general outline of the research is shown to give an overview of the structure.

______________________________________________________________________

1.1 Background

“I believe the auto industry will change more in the next five to 10 years than it has in the last 50.”

- Mary Barra, CEO and Chairman of General Motors

n today’s fast-changing business environments, companies feel the urgency to adapt their business models to compete against new threats and innovative companies. Having a successful business model is crucial to get the maximum value out of modern technological innovations and thus having a competitive advantage (Pal and Aneja, 2016).

As earlier the goal of companies was to establish high entry barriers and defend their competitive advantage, the new business models focus on a more open approach and open up for collaboration with the competition. This new shift challenges the principles of the traditional business models such as ownership of resources and exclusive knowledge (Appleyard, 2007). Also, Teece and Linden (2010) spotlight that in today's industries firms are facing much more complex innovation and see themselves building alliances. Additionally, they stressed the fact that there is an increasing range of competitors from both expected and unexpected industries. We see this shift also happening in the automotive industry as prior strong competitors such as Mercedes and BMW are now collaborating in offering services and building joint ventures. A good example to illustrate this shift and also highlight the emergence of new business models is the car-sharing service ShareNow. ShareNow is a joint venture between Mercedes and BMW offering

I

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car-sharing services in cities (ShareNow, 2021). Additionally, as the car becomes a digitized vehicle, the industry is seeing a threat of new entrants from outside of the traditional automotive industry. Moreover, established players are considering new business models to serve the changing market. This is interesting as the established business model of producing and selling cars remains a central business.

To be able to follow the concept throughout this study, we want to state the definitions we will be utilizing for both the concept of Business Models and the concept of Ambidexterity. There are several different definitions of what a business model is. Therefore, the three definitions that suit this research best have been identified. These three definitions come from Rajala & Westerlund (2005), Rappa (2000), and Stähler (2002) as seen in Table 1.

Table 1 - Definitions of Business Model

Author Publication Definition

Rajala &

Westerlund 2005

“The ways of creating value for customers and the way business turns market opportunities into profit through sets of actors, activities, and collaborations.”

Rappa 2000

“A Business Model is the method of doing business by which a company can sustain itself, that is, generate revenue. The business model spells out how a company makes money by specifying where it is positioned in the value chain.”

Stähler 2002

“A model of an existing business or a planned future business. A model is always a simplification of the complex reality. It helps to understand the fundamentals of a business or to plan how a future business should look like.”

Tushman & O’Reilly (1996) describe ambidexterity as the clash between the current business model of an organization, and the focus of finding new models in a new or evolving market. The authors describe an ambidextrous organization as one that can handle both the incremental innovation of a market that has already matured and the innovation of an emerging market.

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1.2 Problem Discussion

Concerning the existing business model and the innovation of new business models, the automotive industry is something unique. Here, the main business model of the original equipment manufacturers (OEM) such as Porsche, Audi, BMW, Mercedes, or Volvo is centered around a physical product that cannot be digitized - which is the car itself. However, the business models built around the physical product such as the leasing, or the after-sales business are being disrupted by new emerging concepts. Moreover, new business models emerging from technology are being introduced. These circumstances make it especially difficult for the established OEMs to keep up with the trends to address new market needs. The theory of ambidexterity might be particularly interesting and relevant for the automotive industry as the established business model has to be further exploited, but emerging concepts and new potential business models have to be explored at the same time.

Most of the current research that can be found about ambidexterity in business models is about established companies with an easy to digitize product such as in the case of the media- or photography business (O'Reilly & Tushman, 2004; Suzuki, 2019; Åkesson, Sørensen & Eriksson, 2018). We believe that there is a significant value in understanding how an industry that has a product that cannot be digitized and, thus, has to explore value-adding concepts instead, will respond to innovative threats. Industries such as the automotive industry have been hardly researched when it comes to the impact of e.g., technological innovation on their business model and the theory of ambidexterity.

1.3 Purpose of the Study

The purpose of our study is to present a framework highlighting in what regard an ambidextrous approach is helping overcome identified challenges to innovate a business model or introduce new business models in the automotive industry. Moreover, we will provide insights into the challenges the business model innovation provides to this industry and propose potential implications for managers. The research will be based on the theory of business model innovation, ambidextrous organizations, and ambidexterity in business models. Further, we want to add on this literature by looking into the specific case of the automotive industry and its special characteristics regarding the combination of business models. Moreover, we also respond to the call for more detailed studies

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concerning the digital disruption on company strategies and business models (Rachinger et al., 2019); and the call for additional research on the drivers of ambidexterity in organizations (O'Reilly & Tushman, 2013).

Therefore, we introduce the following research question (RQ) for our study: RQ: “How does an Ambidextrous Approach foster Business Model Innovation in the Automotive Industry?”

To answer our RQ, semi-structured interviews with employees and consultants working for German premium OEMs have been conducted. The chosen interviewees are all working within departments closely linked to business model innovation and new strategies. These interviews helped us to gain insights and a thorough understanding of how this industry is handling business model innovation and what role ambidexterity plays within it.

1.4 Outline of the study

The thesis is organized as follows. First, in section two a theoretical framework is built by presenting a literature review that explores the concepts of business model innovation, ambidextrous organizations, and a section that focuses on how ambidexterity and business models can work together. We present current literature discussing what business model innovation is, what it consists of and what new strategies are being pursued. Also, we outline the theory of Ambidexterity and the various forms of it before we combine those two topics and present theory which is focused on ambidexterity in business models.

The theoretical framework is followed by section three and the explanation of the methodological approach with which the study has been performed. To obtain valuable information, the authors reached out to experts working in the innovation and digital departments of established players in the automotive industry. The empirical findings of those interviews are then presented in section four along with an analysis of the insights in section five. This allows us to present our results of the study and answer our research question. The thesis ends with a brief conclusion. Furthermore, we provide recommendations for future research and present the limitations of our study.

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2

Theoretical Framework

______________________________________________________________________ The purpose of this chapter is to provide the theoretical background to the topics of Business Models, Ambidexterity, and the exploration of these two combined as Business Model Ambidexterity. The concepts are the foundation for our study. Therefore, this chapter provides the necessary knowledge for understanding our research.

______________________________________________________________________

2.1 Introduction

To set the stage for this study and to provide relevant information to the reader, academic literature has been reviewed. In the following, we review the existing literature within the topics of Business Model and Business Model Innovation, Ambidextrous Organizations, and the Ambidexterity in Business Models. Online libraries such as, for instance, Web of Science and Primo have been used to perform this research.

The following search terms were used during the review and have been researched separately within the online libraries or in various combinations: “Business Model Innovation”; “Business Model”; “Digital Business”; “Automotive Industry”; “Ambidextrous Organization”; “Ambidexterity”. The findings were each refined for the topics of "Business" and "Management". To make sure that only relevant literature is used the findings have been sorted for "Times cited" from most often to least often. To dive deeper into specific topics and to find even more relevant literature backward citation was applied as well.

The reviewed literature consists of articles and book chapters. By researching the search terms, we were eventually able to identify 81 articles relevant to our topics and study. After reading and evaluating the literature, 66 of those articles were found as appropriate and have been included in this study.

2.2 Business Model Innovation

With the recent fast-paced technological innovation efforts of many companies, those companies need a business model (BM) to adequately serve the new customer needs (Teece, 2010). Raja and Waterlund (2005) define the business model as “The way[...] of

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creating value for customers and the way [the] business turns market opportunities into profit through sets of actors, activities, and collaborations”.

Osterwalder, Pigneur, Clark, & Pijl, (2010) created nine building blocks and introduced the business model canvas to provide a concept that allows to understand and explain the business model of organizations (Figure 1). According to these nine blocks a business model or the organization following the model does serve a specific customer segment. It addresses the needs of this customer segment with the value proposition and delivers this value through different channels such as communication or sales channels. The business model helps also to establish and maintain the customer relationship and provides revenue streams through the successful value proposition. It also defines the key resources, key activities, and key partnerships needed to do business. Last, it also covers the cost structure (Osterwalder et al., 2010). According to Osterwalder et al. (2010), the canvas follows a logic when reading it from left to right starting with the key partnerships and ending with the customer segments while always considering the costs and revenues.

Figure 1 - Business Model Canvas

Due to technological development in many markets, we see an increasing focus on customer engagement, and the companies, as well as the customers, see an increase in value creation (Baden-Fuller & Haefliger, 2013). To capture this new value creation and value proposition the technological development has to be intertwined with the right BM as this defines the delivery of value and the monetization of it (Baden-Fuller & Haefliger, 2013; Teece, 2010). The definition of Stähler (2002) helps us to get a glimpse of what the purpose of a business model should be. He speaks of it as “A model of an existing business or a planned future business. A model is always a simplification of the complex reality. It

Key

Partnerships Key Activities

Key Resources

Cost Structure Revenue Streams

Value Proposition

Customer

Relationship Customer Segments

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helps to understand the fundamentals of a business or to plan how a future business should look like.”

As the publication dates of the two definitions show, the concept of business models is rather new and emerged within the late 1990s. Before this termination people were referring to the organizational design or business strategy when describing the goals of the company (Keen & Qureshi, 2006). However, Keen and Qureshi (2006) also stress the importance of distinguishing between the business strategy and the business model in today’s era. According to them, the business strategy can be understood as the “How” is the company making business. Whereas the business model is about “What” is the company doing. Therefore, we can say that the business model is not a strategy in nature but is closely coupled with the business strategy as the strategic analysis of the company is a crucial step in designing your business model (Keen & Qureshi, 2006; Teece, 2010). Teece (2010) refers to it as a conceptual rather than a financial model of a business which supports the differentiation by “How” and “What” of Keen and Qureshi (2006). Stähler (2017) explains the difference between business strategy and business model in a way that new technologies or products entering the market enable new strategies for the organization. This business strategy now defines the business model with which the organization creates new value (Figure 2).

Figure 2 - Business Strategy and Business Model according to Stähler (2017)

The late 1990s and early 2000s were not only characterized by the dot com era but also by the advent of a more customer-driven world. The new customer-centric focus forced companies to rethink their corporate strategy and complement their revenue model with a fitting business model to ideally respond to the two main dimensions of a business model – the value creation and value capturing (Appleyard, 2007; Amit & Zott, 2012; Baden-Fuller & Haefliger, 2013). Value creation is defined by the identification of customers and how they are engaged with the company. The value capturing identifies the way this new value is delivered to the customer and is being monetized (Baden-Fuller & Haefliger, 2013). Although the creation of such business models can be industry

Business Model

Business Strategy defines creates Value Product /

Technology

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independent - meaning a business model could work in any industry - the incarnation of the model into the business strategy is necessary and thus makes it industry-specific (Keen & Qureshi, 2006). This results in the business model being a crucial feature in markets where there is a choice, competition, and heterogeneity amongst the consumers and producers (Teece, 2010). For instance, the existing business model within the automotive industry creates value by manufacturing cars. Here, the in-house capabilities such as the manufacturing and assembling of the vehicle are crucial. This value is then captured by selling the cars to the end-user including the needed services and warranties (Wells, 2015). Now that the customer has gained special attention new mobility offerings apart from the selling of cars to the end-user have emerged. Access to transportation rather than the possession of the car is, therefore, gaining momentum (Athanasopoulou, de Reuver, Nikou & Bouwman, 2019).

As the corporate strategy paves the way for the creation of the business model, a closer look at the emerging strategies the companies are following will be taken. Further, these new strategies are getting connected to the creation of new business models.

2.2.1 The New Strategies

In the earlier days, the companies were defining their business through stability and building high entry barriers to defend their position in the market (Al-Debi, El-Haddadeh & Avison, 2008; Appleyard, 2007). Therefore, the business world was prior defined by price competition, market share, and cost-efficiency. The companies were focused on controlling and securing their unique knowledge to remain competitive (Keen & Qureshi, 2006; Appleyard, 2007). However, now that the business world has been altered to a rapidly changing environment high complexity and uncertainty have found the entry into the market. With the advent of the internet, the entry barriers have been reduced enormously and already little investment makes it possible to build a company and enter a market. Thus, the markets became more dynamic and complex (Al-Debi et al., 2008). This transformation has forced companies to decrease their before strong internal focus and to focus on a more open approach. With the occurrence of social networks and new ecosystems, the ownership of knowledge is being challenged and thus made it mandatory for companies to rethink their strategic plan (Appleyard, 2007). The focus on the existing value chain has to be readjusted as - due to the uniqueness of the internet – existing

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industries are being reconfigured (Appleyard, 2007; Porter, 2001). The new technological developments allow the customer to get access to the information within the market. As a result, the transparency of the market implies that businesses need to become more customer-centric (Teece, 2010). With the focus on a more open approach and transparency in markets, more knowledge is being collected and generated. This supports the creation of superior products and challenges the principles of traditional strategies (Appleyard, 2007). Prior, the business model within the automotive industry was to produce and sell cars. This also included services like leasing, selling second-hand cars, or doing maintenance services. However, with new entrants and new technologies the car dealers see themselves confronted with new mobility services like car-sharing, the implementation of in-car entertainment, or real-time traffic information thanks to connectivity with the internet (Athanasopoulou et al., 2019).

The evolving phenomenon of open innovation questions traditional values such as the ownership of resources, exclusive access to knowledge, and the competitive advantage through high entry barriers. In fact, the entry barriers are starkly decreasing (Appleyard, 2007). However, to tackle this shift it is not recommendable to innovate solemnly with product and process innovation as those are eroded easily nowadays. Amit & Zott (2012) argue that a business model innovation is more sustainable and better suited to optimally respond to this change. They reinforce this by stating that the needed upfront payment for innovation attempts is dangerous in terms of the still underlying uncertain outcome. By focusing on business model innovation companies have an alternative to complement the process or product innovation. The imposed challenge for the managers, therefore, is the ability to see the opportunities within the business model innovation (Amit & Zott, 2012). However, this must not be the case for the automotive industry. Wells (2015) argues that the decreasing entry barriers might not apply in this particular industry. He highlights that incumbent car manufacturers still have a significant advantage due to the enormous resources needed, the important technical capabilities, and an existing market understanding. Those could still impose huge entry barriers to new competitors.

With the advent of the digital transformation, the competition is not characterized by quality and superior service anymore but by pricing and the profit of the company. As the internet has changed the industry structures and the way companies do business, it became

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harder to become profitable and the new value creation is defined by the usage of the internet (Porter, 2001). The companies also see themselves struggling with the capturing of the new value. As information and data are hard to price the internet and information industries introduced new value capturing models and rely on multiple revenue streams. These are, for instance, subscription-based models and the “Freemium” (Teece, 2010). That established companies make use of these new business models and value capturing tools shows us the case of General Motors (GM). GM introduced a car subscription plan where customers pay a fixed price and can choose among 10 different models and can change the model up to 18 times a year (Colias, 2017). The Wall Street Journal even headlined it as the “Netflix for Cars”. However, also other carmakers such as Volvo with Care by Volvo (Volvo, 2021), Porsche with Porsche Drive Subscription (Porsche, 2021), or Audi with its rental model Silvercar (Silvercar, 2021) are offering such new services now. With those new business models, they are introducing additional revenue streams and new activities in their value proposition.

Particularly within the software industry companies are experimenting with open innovation and thus collaborate and make use of the collective creativity and knowledge. However, the open innovation approach alone bears a great risk in terms of sustainability and value capturing (Appleyard, 2007). Porter (2001) argues to tackle these risks, new internet strategies have to be put upon established and approved business strategies. This ties in well with the statement of Teece (2010) that technological innovation does not guarantee business success per se as it has to be coupled first with a new business model to adjust the value capturing. The fact that people are now able to switch between products and services with a single click underlines the decreasing switching costs in the markets (Porter, 2001). However, this has to be proven first for the automotive industry as it might be different for physical products. When talking about collaboration with other market players, it is important to keep in mind that this only makes sense when the resulting product or service implies a higher switching cost and a better value proposition than before (Porter, 2001).

The dynamic and uncertain nature of the new digital era has put a huge gap between the existing business strategies and the established business processes (Al-Debi et al., 2008) as the case of the music industry outlines. Before the advent of the internet, the music

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industry controlled the supply chain of the content effectively. However, the advent of digital formats as, for instance, MP3 allowed people to digitize and store music online. Thus, the music industry lost its monopoly within the distribution of the content (Cartwright, 2000). The existing business strategy has been disrupted and established business processes did not work anymore. The industry had to rethink its business model and had to come up with new value creation (Cartwright, 2000). The companies have to fill this gap by introducing a new business model to again perfectly intertwine the strategy with the processes. Here, the business model defines the approach in the market and gets the overall business strategy in line with the detailed business processes (Al-Debi et al., 2008).

Keen & Qureshi (2006) describe the interplay of strategy and business model as following:

"A company within an industry needs a strategy; a company aiming at becoming a new entrant, bridge industries, or create a new market space needs a business model first. A company within an industry that sees a major need or opportunity to transform itself will need to articulate those changes through a business model."

2.2.2 Innovation of Business Models

A business model can create new markets or help exploit an existing market, as we now see the way companies make money is different from the earlier industrial era (Amit & Zott, 2012; Teece, 2010). The industrial era was focused on scaling the product and capturing the value was rather easy. Data access, the increased customer-centricity, and the power which goes along with it have substantially changed that. As a result, this industrial business model of scaling and selling has to be rethought (Teece, 2010). In times where digitalization is growing, innovative offerings are most of the time linked to new business models. These new models can change the current logic of the industry or create completely new markets. Digitalization has also changed the current business landscape, and companies are found in quickly changing conditions where business models need to be updated constantly (Kreutzer et al., 2018). Another characteristic of the digital environment today is seen in the form of business model innovation. Many companies are shifting from selling products to offering outcome-based services. (Sjödin et al., 2020)

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Zhang et al. (2017) define business model innovation as the systemic changes in the value proposition, value creation, value capture, and re-configuration of value delivery. Taran et al. (2015) performed extensive research as to when a change in an organization can be considered as a business model innovation. They defined three approaches for this. First, business model innovation is defined as a radical change in the way a company does business. Second, it has to be considered for whom the innovation is new. Whether it is new to the company, new to the market, or new to the industry. The third approach refers to innovation in terms of complexity. Here it is considered that the most complex form of business model innovation is when the change affects all of the business units at once. Such business model innovation can occur as, for instance, the introduction of new content in the offering by adding new activities in the value proposition. This can be seen with the examples of the subscription models of GM, Porsche, Audi, or Volvo prior in this study. Another possibility is the restructuring of already existing activities so that bundling of new offerings is achieved. The combination of those changes can thrive new value for a business as it is introducing novel offerings, establishes higher switching costs through locking the customer in, and gets value-enhancing effects by offering complimentary services. Also, companies see increased efficiency in terms of, among others, costs and logistics (Amit & Zott, 2012). In general, Athanasopoulou et al. (2019) see four main drivers of business model change within the automotive industry. The advent of personalized services, generic mobility services, the advent of shared mobility services, and the ability of cars to become connected to each other and their environment. Those services could thrive business model innovation the most within this particular industry.

It is important to mention that in the traditional business world, the business processes were derived directly from the business strategy. As mentioned earlier, for the new digital era the tactical nature of the business model is needed to connect those two and derive the needed strategy (Al-Debi et al., 2008). As the technological development and the business model interact, the idea of the business model stays mostly the same. As an example, the business model of Amazon began as almost the same as for a traditional brick-and-mortar store. However, it has been developed according to the change in motion and the market needs (Baden-Fuller & Haefliger, 2013).

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2.3 Ambidexterity

Even though it can be read almost daily that nowadays businesses are facing a rapidly changing environment, Tushman and O'Reilly (1996) spotlight that this cliché might be true whatsoever. Within this environment companies often see themselves facing a clash between keeping the current business thriving and focusing on serving the new evolving market. To survive not only in the short-term but also keeping the long-term competitiveness in mind, companies need to be able to compete in mature markets while at the same time be able to develop new products (Tushman & O'Reilly, 1996).

This phenomenon is the topic of ambidexterity and the ambidextrous organization (O'Reilly & Tushman, 2013; O'Reilly & Tushman, 2004; Birkinshaw & Gibson, 2004; Duncan, 1976). An ambidextrous organization can handle both the incremental innovation in the mature market and the discontinuous innovation in the emerging market (Tushman & O'Reilly, 1996). In other words, the company can both exploit the current and explore the new at the same time. In the case of the automotive industry, Wells (2015) understands the incremental innovation, for instance, as the shift from simply selling the cars to end-users towards a “product-service system approach”. The business model of Peugeot is, therefore, a good example of incremental innovation. The company offered customers who bought an electric vehicle the option to also use other vehicles of the company for a specific period. This should reduce concerns about the range of an electric car (Wells, 2015). An example of a discontinuous innovation would be Mercedes and the invention of the Smart. The Smart was a completely new attempt to serve the market. It was its own brand, had a new vehicle concept, and was sold through dedicated retail outlets. At a later stage, Mercedes also made use of the Smart and implemented it as the car for its car-sharing service Car2Go (Wells, 2015), which is now called ShareNow. To provide more clarity concerning exploration and exploitation we want to highlight the definitions of March (1991). He refers to the exploitation part as the part, which is linked to the following of established rules, alignment with the culture, the avoidance of risk within the firm, and the reduction of variance. The explorational part, however, is linked to increasing variance, the constant search for alternatives within the firm, experimentation, and risk-taking (March, 1991). Birkinshaw and Gibson (2004) are using the terminology of alignment and adaptability. However, as most of the literature is

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referring to the two forms as exploring and exploiting, these forms will be used in this study as well. Regardless of the terminology, being a defender of your current business and being the attacker in a new market might be challenging after all (Tushman & O'Reilly, 1996).

O'Reilly & Tushman (2004) examined how organizations can manage current offerings but also keep an eye on innovating and new product offerings at the same time. The challenge is to manage both the past and the future. The ability to follow incremental innovation with your existing product and radical innovation with your new ones requires novel structures within the company (Birkinshaw, 2008). The exploitation part needs tight structures and disciplined processes to secure the current viability of the existing product. For the explorational part to work, however, the respective business unit has to have loose and more flexible structures to make sure that your product is still viable in the future (Tushman et al., 2010; March, 1991).

As we see exploring and exploiting are two potentially conflicting activities (Tushman, 2003), the question companies are facing is how it is possible to manage them without disagreement (Tushman, 2003). O'Reilly and Tushman (2013) and O'Reilly and Tushman (2004) suggest that this could be managed by separating their current traditional business from the new innovative business. This has to be done under the premise, that they are still located in the same management hierarchy. The reason for that is that even though they are separated they need a common set of values and need the company as leverage. If this is not the case, it bears a chance to result in conflict and eventually in disagreement between the two different business units (O'Reilly & Tushman, 2008). If internal compliance is not given, even established market leaders can be disrupted and lose their position in the market, as the case of the semiconductor business shows. R.C.A and Sylvania - the two leading companies in this industry in 1950 - exited business by 1990 as they could not keep up with innovation. Even though they were committed to the technological change, the internal alignment with the new strategy was missing and, therefore, the companies were not able to compete in the new market. (Tushman & O'Reilly, 1996).

By comparing businesses and their success in projects O'Reilly & Tushman (2004) found out that ambidextrous organizations have performed better than other designs such as, for

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instance, cross-functional teams. This is because the exploration- and exploitation-focused business units each operate separately and can follow their guidelines and structures. However, at the same time, they benefit from the larger organization in terms of financial support and talent acquisition.

Although this sounds very promising, organizations often see more advantages in following an exploitation path rather than an explorational one (March, 1991). The returns while exploring are less certain than while exploiting your current business. Moreover, the scope within the explorational business might not agree with the current scope of the organization. This, and the fact that the research which is being done right now might not apply in the future, as the results are more remote in time (March, 1991). In addition to that, by pursuing exploration the managers possibly have to destroy their business in the long term - the very business that has made the business once successful (Tushman & O'Reilly, 1996). Those facts make it hard for organizations to see the advantages in exploration (March, 1991) and, thus, make it difficult to pursue. Not surprisingly the management is often more likely to favor the exploitation path of the company, as this is directly linked with the short-term business performance. Moreover, this approach is much safer to follow as there is hardly any uncertainty for the company (March, 1991; O'Reilly & Tushman, 2013). However, relying solemnly on exploitation might be detrimental to the long-term success of the organization. By following the ambidextrous approach, you are minimizing the threat of bad long-term performance (March, 1991; Birkinshaw, 2008).

We see that the balance of exploration and exploitation is crucial since businesses see themselves enticed to follow the exploitation path to perform better short term. However, in that case, a slight change in the market can bring your business in jeopardy. Nevertheless, when focusing only on the explorational path the companies are building their business on the cost of the current performance (Birkinshaw & Gibson, 2004; March, 1991). The fact that both parts are competing for the same scarce resources makes the balancing even more crucial (March, 1991). In general, exploration is better for a dynamic environment whereas exploitation thrives business in competitive ones. However, for a short-term view, the explorative innovations can be useful in competitive markets as well (Volberda, 2006).

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O'Reilly and Tushman (2013) conclude that the ambidexterity of a firm has a positive influence on the company’s overall performance and growth. This approach still might be slightly more favorable for large firms within uncertain environments and high competition. Despite the contradiction of exploiting and exploring, an ambidextrous design still benefits both the current and new evolving product. By decoupling the two parts, each can flourish better (Tushman et al., 2010).

2.3.1 Forms of ambidexterity

There have emerged several forms and ways of managing ambidexterity. Literature has been talking about a sequential (O'Reilly & Tushman, 2013; Duncan, 1976), a structural (O'Reilly & Tushman, 2013; Birkinshaw & Gibson, 2004; O'Reilly & Tushman, 2008), and a contextual way (O'Reilly & Tushman, 2013; Birkinshaw & Gibson, 2004; O'Reilly & Tushman, 2008) of implementing an ambidextrous approach within the company. The sequential ambidexterity is characterized by the shift between the phases of exploiting and exploring (O'Reilly & Tushman, 2013). Meaning that companies are adjusting their strategy according to the phase of the innovation process. However, this approach assumes that change is “slow” and occurs in sequences. Therefore, this might be more applicable to stable markets (Duncan, 1976).

The structural ambidexterity or simultaneous (O'Reilly & Tushman, 2013) ambidexterity makes use of autonomous subunits each focused on either exploration or exploitation. As this approach is better suited for a dynamic and fast-changing market (O'Reilly & Tushman, 2008) it also bears the risk of too much isolation between the subunits. The missing interaction of both can result in a lack of understanding of each other and might end up in a conflict (Birkinshaw & Gibson, 2004). Therefore, subunits must be vertically tightly but horizontally loosely coupled. In that case, the exploratory units are small and decentralized and the explorative ones are rather big and centralized (Tushman, 2003). Within this form, the pursuit of both exploring and exploiting is also possible by following two different business models (O'Reilly & Tushman, 2008).

The third possibility is the contextual ambidexterity which lays the focus rather on the individuals within the units or business models and not on the unit itself. Within the contextual ambidexterity, the exploration and exploitation are followed at the same time

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within the same unit (O'Reilly & Tushman, 2013). The units have a dual structure (Birkinshaw & Gibson, 2004; Tushman, 2003) and rely on the coordination of a manager or the leader of the unit to make sure that people work with the needed approach at the right time (Birkinshaw & Gibson, 2004). However, this approach might result in the so-called "stuck in the middle" phenomenon. Meaning that when you follow both exploration and exploitation at the same time in the same business unit, neither of them is followed appropriately. The unit is, therefore, “stuck in the middle” of both (O'Reilly & Tushman, 2008).

There is not necessarily a need to agree on only one form within a company. For instance, Hewlett Packard or 3M are both following a structural and a contextual approach at the same time. Thus, the forms of the ambidextrous approach can be seen as complementary (Birkinshaw & Gibson, 2004).

2.3.2 Ambidextrous Organizations

The challenge with such an organizational transformation is that the management has to have the ability and leading skills to manage and oversee the completely different approaches. Although they have different values and goals within each approach, they have to be managed together (O'Reilly & Tushman, 2004).

A technological shift in the market forces companies to go down an explorative path (Suzuki, 2019). However, particularly for established organizations, this could be a huge organizational challenge. Those incumbent firms may have structural as well as cultural inertia to face. Structural inertia is the general resistance to change as there are established structures within the company. Cultural inertia describes the resistance to change due to established thinking on how things have to be executed (Tushman & O'Reilly, 1996). Even though breaking those inertias and routines is hard, an ambidextrous approach makes sure that the traditional business is not in jeopardy when exploring new business ideas. Such a change within the structures of a company can only work with the appropriate bedrock. The executive team has to show commitment and share the right vision throughout the whole company (O'Reilly & Tushman, 2004).

We see that organizational transformation is crucial when we take a look at companies that successfully have undergone such change. When Fujifilm has been losing ground in

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the photography business, they diversified themselves by following an ambidextrous approach. By pushing into the cosmetics industry but remaining in the photography business, Fujifilm used their existing knowledge on collagen and nanoparticles to enter the cosmetics industry. The ambidextrous approach promoted the synergies between the business units and made this transformation possible. The established business of photography was not affected, and they did not cannibalize. Fujifilm explored the new business and exploited the old one at the same time (Suzuki, 2019).

Another example of a successful company following an ambidextrous approach is Johnson & Johnson. They showcase how important the leverage of a big company for the autonomous business units is. Johnson & Johnson has over 160 companies each following either an explorative or an exploitive approach (Tushman & O'Reilly, 1996).

2.4 Business Model Ambidexterity

As mentioned previously, companies have met the need for new business models due to new fast-paced technological efforts (Teece, 2010). The concept of ambidexterity in business models comes from the idea, that companies need to adapt and develop new business models without losing focus on their current value creation sources. In other words, it is “how an established firm organizes for an emerging business model” (Khanagha et al., 2014). When focusing on resources, Liao et al. (2018), found a relationship between technological innovation ambidexterity, and firm performance. Here, innovation ambidexterity has a direct effect on the business model ambidexterity. Which also ends up having a direct impact on company performance. They find that business models can indeed be ambidextrous where business model ambidexterity has a more positive and stronger effect on performance than other business models like single-dimensional ones. Khanagha et al. (2014) do not think that one single approach is enough, as they found that differing combinations were important to allow for the organization to make a smooth transition into business models. They mention that companies need to have a strategy that is based on observation, experimentation, and learning.

In a study about the role of ambidexterity in the process of adopting new business due to new and emergent disruptive innovation models Kranz et al. (2016) think, that there is still little empirical research regarding the dynamic of companies that change their

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business model. In findings of what not to do, it has been discovered that some companies under or overestimate how disruptive certain innovations can be. This leads to miscommunication on how extensive the new changes in the business models should be (Kranz et al., 2016). As Stähler (2002) defines it, companies should always understand the fundamentals of their business but also be able to plan on how the future of their business looks like.

Khanagha et al. (2014) do believe that there is an increasing amount of research regarding companies managing two different business models. They, however, point out that there exists a threat of cannibalizing your current business model. Gilbert (2005) believes that “any investment in developing an alternative business model implies speeding up the obsolescence of the current business model on which the firm is financially dependent.” Liao et al. (2018) propose that the business model ambidexterity relates to two different concepts. A Market approach and a Market-Driven approach. For a Driving-Market orientation, the market structure and the market behavior have yet to be shaped. Whereas in a Market-Driven orientation the market structure and behavior are given (Jaworski, Kohli & Sahay, 2000). For Driving-Market approaches, the focus should be on leading customers instead of focusing on the evolution of the firm’s offerings. A different way of looking at this is that the company should focus on strengthening the existing business activities and structure. A Market-Driven approach, on the other hand, emphasizes that adapting to existing market requirements and improving gradually, is key. In other words, the organization needs to adopt new business activities and structures. When the company can follow both approaches due to fast-paced changes in the market, business model ambidexterity is found (Liao et al., 2018).

2.4.1 Strategies to adapt new Business Models

Khanagha et al. (2014) advise that the organization “needs to ensure that it times its entry well not only by monitoring the external environment but also by increasing the organization’s preparedness for a swift transition when appropriate”. These organizations must take a cautious decision of when, and how, they want to adopt a new business model. Winterhalter et al. (2016) advise that in some cases, new business models do not necessarily mean a radical change. Thus, complete separation is not recommended.

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A company must apply a contingency approach in which either two businesses are integrated or separated based on the strategic similarity between the two business models (Markides and Charitou, 2004).

Anzenbacher and Wagner (2020) find that what is relevant when pursuing new business models, internal knowledge spillover is more important to support the exploitation of adopting new models, than the external knowledge gained by alliances and acquisitions. This is also supported by the findings of Winterhalter et al. (2016). In a study performed by the authors on how companies integrate or separate business models at the value chain and its different activities, they found that no company was able to fully integrate its least expensive business models into their more premium ones. They did however find that companies can become ambidextrous in their business models by applying domain separation that allows them to separate the activities in their value chain, to address different customer segments.

Rissanen and Karhu (2017), performed a study to research how organizations can innovate with multiple, but separate business models at the same time. They do this by exploring organizational ambidexterity, therefore seeing the effect that it has in new business models in organizations. It has been identified that the main way to do this was by dividing their exploration and exploitation activities into separate business models. Gibson and Birkinshaw (2004) had previously suggested that organizational ambidexterity could be achieved by “developing structural mechanisms to cope with the competing demands faced by the organization for alignment and adaptability.” However, Gibson and Birkinshaw (2004) do not believe that ambidexterity is best achieved through business structure, but by allowing individuals to make their own judgment in how their time on exploration and exploitation is used. Structural mechanisms are explained as when a company achieves ambidexterity by the creation of dual structures in the organization, which then leads to structural separation.

2.4.2 Ambidexterity and New Business Models

Minatogawa (2020) suggests that business model innovation and organizational ambidexterity are integral mechanisms that allow for companies to be sustainable. Although their research mainly applies to SMEs, they point out that these types of

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companies must be permitted to not only exploit their current business models but also be able to explore new ones. This is considered necessary for smaller companies to survive and grow.

However, not all companies have the ability to build an ambidextrous organization. Stelzl et al. (2020) performed a research study to find out how a company can build these types of organizations, and what capabilities and resources are needed. In their study, they found that there are three organizational ambidexterity types, which are temporal, structural, and contextual. To achieve this, companies need to develop five areas: culture, strategy, structure, routines, and IT. Once ambidexterity has been achieved, a company can proceed to explore new business models. Cegarra-Navarro et al. (2018) add to these previous findings by also underlining that firms can successfully work in an ambidextrous manner only when the managers can work in a context where business model exploration and exploitation activities take place. This is supported by Lin and Ho (2016), who highlight that successful companies are the ones that can be ambidextrous within a dynamic environment. This happens once there is the simultaneous pursuit of exploitation and exploration.

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3

Methodology

______________________________________________________________________ The purpose of this chapter is to highlight how the research has been conducted. Thus, this chapter covers the research philosophy, research design and strategy, and data collection. It outlines our decisions and reasons to follow certain methods and covers the interview design as well as the research quality.

__________________________________________________________________

Figure 3 - Research Approach

Our research approach can be seen in Figure 3. In the following, we will highlight our decisions and the way the study was conducted by presenting the Methodology. Furthermore, we will showcase how we have achieved a credible and ethically correct study.

3.1 Research Philosophy

Easterby-Smith et al. (2018) highlight the fact that the understanding of philosophical issues is useful for different reasons. According to the authors, it gives researchers the obligation of understanding the philosophical characteristics of the research, and to clarify the research design. They also point out that the philosophical issues can help understand which research designs will be useful for a certain study and which will not. In general terms, the research philosophy allows building the surroundings of the research methods that will make way for contributions (Easterby-Smith et al., 2018).

Ontology: Relativism Epistemology: Positivism Methodology: Qualitative Research Method: Grounded Theory using semi-structured Interviews

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Grounded theory has continued to evolve throughout time, and it is now being divided into grounded theory according to three different authors. These are Glaser (1978), Strauss (1987), and Charmaz (2000). In the case of our study, we will be using grounded theory according to Strauss (1987) given that we are using previous literature and insights that have emerged from sources like previous data from research. In this type of grounded theory, the epistemology is weak positivism. Furthermore, the ontology is relativism as it is about the different perspectives that the researchers take. These results will be more reliable when observations from different perspectives have been made (Easterby-Smith et al., 2018).

Considering the research question of how an ambidextrous approach fosters business model innovation within the automotive industry, we want to explore the topic by conducting interviews with people from the industry. Having previously read and gathered observation data, we have decided that grounded theory is what allows us to develop a theory. The grounded theory uses data comparison and coding of the data by gathering data, coding and building categories grounded in data, and the development of themes and concepts (Easterby-Smith et al., 2018).

3.2 Research Design and Strategy

Qualitative research is defined as “any kind of research that produces findings not arrived by means of statistical procedures or other means of quantification” (Strauss and Corbin, 1990). Quantitative research seeks a causal determination of findings, while qualitative research seeks understanding and extrapolation to similar situations. Also, qualitative research wants to understand phenomena in a setting with a specific context by using a naturalistic approach. Whereas quantitative research tests theoretical generalizations using quantitative measures and experiential methods (Hoepfl, 1997). Given that good qualitative research cannot be done by numbers, Easterby-Smith et al. (2018) highlight that it requires a certain degree of creativity. The authors define qualitative data as pieces of information gathered in a non-numeric form. In our study, this is the type of data that has been collected from interview recordings and transcripts, existing literature, company websites, and complementary secondary data. As mentioned by Easterby-Smith et al. (2018) this type of data is rarely discovered, as it has to be developed through, for

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instance, preparing and conducting interviews. The process for the data collection will be properly explained in a further section of our study.

As Kvale and Brinkmann (2009) point out, the goal of qualitative interviews is to collect information that gives meaning and allows interpretation to the views of the interviewees. Easterby-Smith et al. (2018) underline that for researchers to achieve proper insights for our study, they need to be sensitive and skilled enough to understand the viewpoint of the persons being interviewed. This is also important because people from different companies in the industry have been interviewed, which can lead to a difference in cultures, approaches to innovation, and viewpoints of the automotive industry.

Due to the current situation, the interviews will be conducted remotely. This, however, does not mean that interview results cannot be achieved. Easterby-Smith et al. (2018) dedicate a section of their book solely to remote interviews. While they say that it does offer more flexibility and less commitment for the persons being interviewed, the authors do point out that other reasons make remote interviews not as effective. They point out that mediated interviews can lack the immediate contextualization of a face-to-face interview. However, this can be overcome by performing synchronous mediated interviews, such as telephone and internet-based conversations. However, we have a close connection to the automotive industry, which allows us to have more effective communication with the interviewees. These resemble face-to-face interviews by allowing us to converse at the same time with the persons we will be interviewing. The advantage of performing these types of interviews is that they prove to be effective by giving context in real-time. This allows us to perform a proper set of interviews for our research which will provide us with the insights needed for our study. Combined with the familiarity that we have with the context of the automotive industry, it will also enable us to access information in the context of the phenomena we will be studying (Easterby-Smith et al., 2018).

3.3 Data Collection

3.3.1 Sampling

As a first step within the data collection, a sampling strategy helped us identify the matching individuals for our study. As the goal of the study is to research ambidextrous

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organizations and how an organization follows business model innovation, we wanted to reach out to those departments within OEMs or people working with them. Therefore, purposive sampling has been pursued. However, as also people from our personal and business network have been contacted, there might be an indicator for a convenience sample (Easterby-Smith et al., 2018).

For our study, non-probability sampling was necessary as there was a bias towards who was suitable for our study in the first place. As we are deep-diving into the topics of innovation and ambidexterity, there was a stronger focus on innovation or strategy departments and people working within those topics. The interviewees could not have been chosen at random, therefore, probability sampling was not an option. As there was an idea of what the sample had to consist of, the interviewees have been purposefully selected. They had to help further deepen the understanding of the topic and provide helpful insights.

After identifying promising individuals, they got contacted via LinkedIn or Mail. With most of the participants, there was a little chat and discussionto see if they were indeed suitable for the study and to present the topic. To identify those suitable interviewees, the following criteria have been developed which the individuals had to fulfill. This further strengthens the purposive sampling approach (Easterby-Smith et al., 2018).

a) Solid professional experience (For instance over 3 years) and knowledge in the automotive industry and the transformation of it

First, the interviewee had to have professional experience in the automotive industry since the study gives this industry special attention. However, it has additionally been expected that the interviewees have knowledge and interests in the future of this industry and its transformation. This was an appropriate criterion to identify interviewees who are familiar with evolving trends and have an opinion on where the industry is heading.

b) Working within the topics of emerging business models and a sense for new technology

Next, the interviewee should be working within emerging business models and should be familiar with the role technology plays within them. New trends like big data, urban

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mobility, sharing economy, etc. should be known and they should have certain knowledge concerning those topics.

c) Experience with innovation and the new trends in technology and management Additionally, the interviewee should bring experience also in new management trends, for instance, agile project management or collaborative forms of organizing. This criterion ensured that the interviewee has no problem understanding the theory of ambidexterity. It was not required that the interviewee has to know what Ambidexterity means, however, they should be capable of understanding it after explaining it to them. 3.3.2 Data Collection Technique

3.3.2.1 Interviews

As we were focused on departments working with innovation in the automotive industry, we have identified that most of these departments are rather small and, thus are located within the headquarter of the organization or in a close location with it. As the researchers were based in Mexico and Germany we have thought about potential participants in this area. The automotive industry in Mexico is strongly focused on the manufacturing part of the industry and not on the strategic one. However, as one researcher is based in Germany, the most promising participants were located in this area. After evaluating the given criteria in combination with the geographical circumstances, we had a pool of 16 potential participants within five companies. Those 16 participants have been identified within our professional network and by browsing through business platforms such as LinkedIn. When reaching out to them, four potential participants never replied, and five potential participants either did not have time or did not felt comfortable being interviewed for an academic study. As for the participants who have agreed to participate, we scheduled meetings for conducting semi-structured interviews. Eventually, we ended up with seven interview partners from three different companies.

The professional experience of the Interviewees ranges from four years up to 12 years. Almost all the positions were closely linked to digital topics within the automotive industry such as connected cars and smart mobility. However, we also had Interviewees such as A2, A3, and A4 who have professional experience in the area of new portfolio and strategies, or Interviewee C1 who has experience in API Management and Legal

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topics (Table 2). The diverse knowledge in the field of the automotive industry helped us to achieve a deep knowledge and understanding of how the automotive industry experiences the need for new business models and the way it applies an ambidextrous approach. The interviews were done with German automotive OEMs (Interviewees A1-A4) and a consulting firm (Interviewees C1-C3) operating within automotive topics. However, due to the broad knowledge of the interviewees, we were also able to catch some insights on the automotive industry not related to the German premium car market. To ensure the promised anonymity to the interviewees we have given them a number in addition to the type of company they were working for to represent their name. This number was chosen at random and does not give any hints on the order the interviews were conducted.

Table 2 - Interviewees

Company Interview Position Company Type of

Company size (employees)

Location Knowledge Experience

A C1 Senior Consultant – Customer Experience Consultancy >3.000 Germany API Management, Legal, Product Management 6 Years A C2 Senior Consultant - Digital Solutions Consultancy >3.000 Germany Digital Strategy, Infotainment Services, Business Model Innovation 4 Years A C3 Senior Consultant - Digital Solutions

Consultancy >3.000 Germany After Sales, Business Model Innovation 5 Years

B A1 Manager – Digital Ventures Automotive OEM >280.000 Germany Digital Platforms, Customer Experience, Artificial Intelligence 12 Years C A2 Specialist - Strategy & Portfolio Management Automotive OEM >35.000 Germany Innovation, Smart Mobility, Digital Strategy, Portfolio Management 7 Years

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C A3 Specialist - Strategy & Portfolio Management Automotive OEM >35.000 Germany Connected Car, Business Model Innovation, Smart Mobility 4 Years C A4 Head of Strategy & Portfolio Management Automotive OEM >35.000 Germany

Connected Car, Sales,

Digital Services > 5 Years

The semi-structured interview approach makes use of an open but guided interview (Easterby-Smith et al., 2018). With the help of this technique, we were able to address the questions according to the knowledge, position, and openness of the interviewee. Moreover, the open nature of semi-structured interviews often provides a higher degree of confidentiality (Easterby-Smith et al., 2018). It allowed us to be more flexible when conducting interviews with interviewees from different standpoints. As our interviewees come with special knowledge within the topics and industries of consulting, and automotive we needed the flexibility of this approach. It allowed us to adjust our interview with different possible following-up questions according to the standpoint and professional background of the interviewee. This was something we found necessary to address our research question to each of them in the right manner.

We also avoided asking sensitive questions and tried to formulate the questions in a way free from personal beliefs to avoid bias in the answers. To ensure those points, the questions were developed beforehand, and an interview guide (Appendix 3) has been created.

The theory provided within the theoretical framework such as the Business Model Innovation and the Ambidextrous Organization helped us in structuring our interview accordingly. We wanted to address topics we have identified in the literature such as among others the argument that decreasing entry barriers do not apply in the automotive industry, the balance of exploration and exploitation, and the structural and cultural inertia.

3.3.2.2 Secondary Data

In addition to the interviews, secondary data in form of company websites has been used to ideally understand the context of new business models in the automotive industry. We

Figure

Figure 1 - Business Model Canvas
Figure 3 - Research Approach
Table 2 - Interviewees
Figure 5 - Code-to-Theory Model
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References

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