Success factors of corporate business incubation with a focus on the microelectronics industry

Abstract

In the dynamic market environment like the microelectronics industry, radical and continuous incremental innovations are necessary to establish an overall long-term success of the core organisation. Larger companies are often experiencing difficulties to support new businesses, especially when they are dealing with radical innovations. Structural ambidexterity is one approach to separate the explorative focus areas like R&D and business development from the exploitative focus areas like operations management. However, after successfully establishing a new business and/or technology, it can be incredibly challenging to manage the integration into the operating business or even establish a new business unit. This master thesis is aimed to identify potential success factors that are advised to consider for such integration endeavours. Four cases from AT&S history that have dealt with an integration were selected. Interviews were conducted with involved AT&S employees to gather insights and individual experiences. A qualitative research methodology was applied to analyse the success factors out of the historic projects that have been conducted by AT&S. The results were compared and complemented with findings from the literature on similar endeavours. It total, 53 important factors were identified to contribute to the success of the integration efforts. These factors were summarized within an overall success factors model, which was structured into dimensions of ordinary and dynamic capabilities. The top management commitment, dedicated project teams, the innovative technology and the problem-solving solving capability of AT&S as well as the close collaborations with the leading customers, were named as the crucial factors. Besides, also challenges, risks and the involvement of different departments were also noted from the interviews. The results of the thesis provide an overview on the success factors of an integration endeavour that AT&S as well as other companies can consider in future similar undertakings. Moreover, additional recommendations were made on how to facilitate new ventures of sustainable technology and/or business model innovations in companies. In detail a suggestion was made, to link the technology innovation cycle of AT&S, referred as stage gate process with a new venture creation cycle. Furthermore recommendations on the proactive business development were elaborated to continuously screen the market for technology and economic developments. Additionally, it was also advised to maintain and facilitate the success factors model by a dedicated group function. Such a business incubation group function can be a separate department or be a part of the strategy or innovation department. The group function can also encourage cross-functional exchanges. Lastly, it was proposed that the new venture development can be guided from a corporate perspective to align all activities with the strategic direction of the company.