Combining open innovation, supplier development, and business relationships: A study of Statoil s LOOP programme
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This thesis investigates Statoil s LOOP programme in light of three bodies of literature: open innovation, supplier development, and business relationships. In an open innovation model, companies allow valuable ideas to come from inside or outside the firm. In addition, ideas are permitted to reach the market from inside or outside the company as well. Open innovation is divided into three main categories, depending on whether the company exports internal ideas (inside-out process), imports external ideas (outside-in process) or combines the two processes (coupled processes). Supplierdevelopment involves creating, sustaining and improving suppliers. Thus, it aims atestablishing a long-term competitive supply base for the firm initiating the supplierdevelopment activities. Further, business relationships can be characterized by twofirms or organizations creating strong ties over time, aiming at achieving mutualbenefits. Business relationships develop over time, and when building up andmaintaining relationships, episodes play a vital role.The purpose of this thesis is to improve the insight in programmes that combinesupplier development with open innovation. In addition, which effects such programmeshave on the suppliers relationships with the administrators of the programmes andother external actors will be investigated. This is done by examining Statoil s LOOPprogramme from both Statoil s point of view and from the perspectives of fifteencompanies that have participated in the programme, particularly emphasizing the latter.The analysis shows that from the perspectives of the suppliers, LOOP has been a tool for both inbound and outbound open innovation, thus representing a coupled process.Moreover, all of the suppliers used intentional boomeranging either once or severaltimes when developing their ideas. The LOOP programme contributed to enhancing thecapabilities of eleven of the fifteen suppliers. Hence, the LOOP projects do not alwaysaffect the suppliers capabilities, but in many projects, the capabilities of the suppliers are enhanced. Furthermore, LOOP can affect the state of the suppliers relationships with Statoil. In all projects that have had high importance for the suppliers, the suppliers have either been recognized by, or in a relationship with Statoil prior to LOOP. Through LOOP, the relationship the suppliers have with Statoil may influence the suppliers relationships with other actors.From Statoil s perspective, the LOOP programme is a means for attracting and absorbingknowledge, and illustrates inbound open innovation. However, it is also a tool forsupplier development. Moreover, LOOP can both contribute to starting up newrelationships and change existing relationships. Since both Statoil s existing andpotential suppliers can suggest ideas for LOOP, the episodes that take place in the LOOP projects can either affect an existing relationship or help building up a new one.The results in the analysis show that Statoil s role in the LOOP project varies greatly. It seems that both the open innovation aspect and the business relationship aspect of LOOP are more dominant than the supplier development aspect, though this varies somewhat among the projects. If Statoil wants to combine these three aspects through LOOP, for all suppliers participating in the programme, it should consider taking a more active role in all of its LOOP projects.