Analysis of open innovation strategy and challenges faced by automotive component manufacturers in KwaZulu-Natal, Gauteng, and Eastern Cape in South Africa.

Abstract

The automotive components manufacturing sector is an essential complementary strategic player in the automotive industry in South Africa. Without this sector's vibrancy, the automotive industry cannot forge ahead as a globally competitive player and critical economic growth driver in the local economy. This inevitable dynamism and its continued sustainability in the automotive industry is currently dependent on foreign players, who are bankrolling its activities. To successfully fulfil its mandate and survive the cutthroat competition, the automotive components manufacturers have no choice but to engage in innovation. However, the levels of competition in the sector have forced the automotive components manufacturers to move away from closed innovation to adopting a more open approach to innovation in the quest to build sustainable competitive advantage. This study investigated how open innovation strategic alignment among the various organizational managers influences sustainable competitive advantage and decision-making from the selected automotive component manufacturers in South Africa. The study's broader aim was to examine the nature and extent to which these firms' top management are aligned to execute their open innovation strategies and overcome the inherent operational challenges. The study used a mixed research methodology with a sample of 44 randomly selected respondents drawn from a target population of 100 chief executive officers, senior and research and development managers subscribed to the National Association of Automotive Component and Allied Manufacturers from KwaZulu Natal, Gauteng, and Eastern Cape provinces The results identified that the challenges faced by automotive component manufacturers are lack of resources, lack of dynamic capabilities, and high-risk exposure, with the lack of resources being the most significant. The study contributes to knowledge by extending the concept of attaining aboveaverage returns by integrating the resource-based view theory, the dynamic capabilities theory, and the portfolio theory. It further recommends practical managerial solutions to overcome open innovation challenges through managers' strategic alignment, risk mitigation, erosion factor mitigation, improved organisational innovation culture, and product development capabilities.