The emergence of the Digital Economy accordingly brought about changes in the corporate management paradigm. In order to proactively respond to the rapidly changing environment and outlive the intensified competition, it is imperative for companies to form a sustainable competitive strategy through collaborations with other firms.
This thesis proposes that as the Digital Economy rises on the horizon, collaboration between large corporations and small venture companies is required in Korea. It classifies the types of collaboration into five categories and reflects upon a set of few successful cases. This thesis particularly focused on the collaboration case between an MP3 business unit of a prominent Korean electronics company and many small venture companies, suggesting the alternatives that could most benefit the collaboration opportunities and providing the co-survival strategy associated in the process.
Under such a digital economy, environment for collaborations revolutionize, and the firms are required to meet the need for specialization and diversity, and to become large and flexible at the same time. Consequently, it can be said that there is a need for building a collaboration between large corporations and startup companies in order to reciprocally strengthen and complement the strength and weakness of each other in such a manner that assures co-survival.
Collaboration can be classified into five categories; outsourcing, strategic alliances, spin-offs, equity investment and M&A.
“A” Electronics company traditionally continues diverse types of collaboration with other firms. Specially, MP3 business unit of the firm actively reflects its business characteristics in business strategy and collaborate with many startup ventures in Korea and overseas to maintain competitive advantage in the business area such as hardware platform, digital contents, and security & standardization.
However, “A” Electronics company needs to enlarge its collaboration with startup ventures to maintain competitiveness and escalate its core competences. Clear mid and long-term business strategy along with the master plan to enlarge the collaborations should be presented, and also business process related with the collaborations should be improved. Moreover, horizontal relationship with the collaborations based on mutual trust should be established.
This paper will be a useful reference for Korean large companies and small ventures, which wants to sustain and enlarge their competitive advantages through collaborations.
