Innovation is considered a key success factor for sustaining competitive advantage in business. Especially due to tense global competitiveness a firm must constantly be innovative and differentiate itself. Today, there is an apparent trend towards the management paradigm of open innovation. Using external and internal knowledge sources to accelerate internal innovation or using external paths to markets for internal knowledge not used, holds many opportunities but also possible threats for companies. Therefore, this master thesis investigates the advantages as well as disadvantages open innovation might hold. Additionally, it suggests management implications to reap the greatest benefit and overcome the barriers linked to open innovation.