The impact of open innovation challenges on automotive component manufacturers’ competitiveness: An insight from the South African automotive industry

Open innovation is a function of managing innovation challenges within an organization to achieve sustainable competitive advantage. To achieve this, organizations have to configure and regulate their strategic resources, harness their core competencies and absorptive capacity, and manage uncertainties inherent in their business activities. This study aimed to examine the impact of open innovation strategy challenges on the competitiveness of automotive component manufacturers (ACMs) in South Africa. It addressed ACM open innovation challenges and their effect on competitiveness and the relationship between open innovation strategy and competitiveness. The study employed a quantitative methodology with a sample survey consisting of 44 respondents comprising the owners, and senior and junior managers responsible for research and development. The results identified that the challenges faced by ACMs are lack of resources, lack of dynamic capabilities and high-risk exposure, with the lack of resources being the most significant. The study’s significant implications are that ACMs should design strategic measures that mitigate the adverse spillover effects of resource deficiencies impacting dynamic capability transformation and risk mitigation. The study contributes to existing knowledge by extending the concept of attaining above-average returns through integrating the resource-based view theory, the dynamic capabilities theory, and the portfolio theory.