The “knowledge distribution power” of the innovation system helps us to understand how and why innovation occurs. In this study we show how an SME implemented a strategy of insourcing & innovation to achieve sustainable competitive advantage and compete with the dominant market leaders. Specifically, our research shows how this family run automotive trailer manufacturing business in Busto Arsizio, Italy, accessed knowledge from universities to enable it to secure advanced manufacturing technology with a Doing-Using- Interacting mode of innovation (DUI) to gain competitive advantage. We identify an internal innovation process that captures the relevant specific Doing-Using-Interacting phases. This study contributes to the stream of literature on DUI innovation, specifically to Trott and Simms’ (2017) study.