Collaboration Processes between Small Local Retailers and Startups: The Case of Pansuku

Abstract

This study examined the alliances made by regional bakeries and Pan for You, Inc. (PFY), as examples of regional small- and medium-sized enterprises (small businesses) generating new value through open innovation together with a startup. Employing a modified grounded theory approach, data from interviews with ten regional bakery owners were used to analyze the alliance formation and collaboration processes. The study results contrast with previous research that found the motivation to enter an open innovation alliance was to grow sustainably due to the perceived benefits of innovating independently. However, in this study the motivation of the regional bakeries was to stabilize their business. The perceived low risk of working within the startup business model was the most critical in a regional bakery’s decision to collaborate with PFY.