The importance of dynamic capabilities on creating sustainable competitive advantage through external corporate venturing: a case study on TomTom

Abstract

In 2008 the Dutch company TomTom finalized the acquisition of its supplier Tele Atlas. The main goal for this acquisition was to increase its competitive advantage in the rapidly changing market of (mobile) navigation. This study tries to examine the importance of dynamic capabilities on creating sustainable competitive advantage through external corporate venturing, instead of classical merger and acquisition theory. Thereby the acquisition of Tele Atlas by TomTom is presented as a case study using a sample of 7 interviews with (former) employees of TomTom, annual reports, press releases and other existing case studies on TomTom. The findings show that the dynamic capabilities TomTom held prior to the acquisition changed over time and didn’t create sustainable competitive advantage in the market of (mobile) navigation in the years following the acquisition.