Competence building in software technologies: the case of the German automotive industry

The transformation to a software-defined car and the necessary competence building in software pose severe problems and threats for established car manufacturers. This study examines the adaptation of German car manufacturers to new digital technologies with their own competence building in software and with external partnerships. The firm's resource- and competence-based views are used as the theoretical foundation. The empirical analysis includes an explorative case study of two German automotive firms and their external cooperation partners. Case studies show that automotive firms have chosen different pathways to build digital competencies. They realise a firm-specific mixture of competence building by investing their own resources or by partnering with external cooperation partners. The results showed remarkable differences in competence levels and successes between the two firms. The main theoretical result of the explorative case studies is that the management of dependencies, building or dissolution of relationships with other firms, aspect of time, and aspect of firm organisation must be included as endogenous factors in the theoretical analysis of competence building.