Sse open innovation and strategy group2b_2011

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Sse open innovation and strategy group2b_2011

  1. 1. Open Innovation and Strategy <br />Group 2b<br />
  2. 2. Open innovation<br />open innovation is creating new empirical phenomena that exist uneasily with well-established theories of business strategy.<br />Forcing firms to reassess their leadership positions which reflect the performance outcomes of their business strategies.<br />To take benefit from collective intelligence and consumer participation.<br />
  3. 3. Open strategy<br />Balances the tenets of traditional business strategy. <br />Embraces the benefits of openness as a means of expanding value creation for organizations.<br />Places certain limits on traditional business models when those limits are necessary to foster greater adoption of an innovation approach.<br />Introduces new business models based on invention and coordination undertaken within a community of innovators.<br />Effective open strategy will balance value capture and value creation. <br />Open strategy is an important approach for those who wish to lead through innovation.<br />
  4. 4. Porter’s Five Forces conception<br />
  5. 5. Closed Innovation VS. Open Innovation <br />
  6. 6. Different kinds of open business<br />The article indentifies four different kinds of open business models: <br />Deployment - users are willing to pay for it, due to high user                                         experience, even if the initial technology is free. <br />Hybridization - multiple versions offered, for example both public                                     free and private commercial ones.  <br />Complements - free software, but device that costs. <br />Self-service  - users create software for its own needs.<br />Indeed, these models can occur simulaneosly within a company.<br />
  7. 7. Business areas<br />Most common within information technology, but does occure within other areas as well, for example:<br /> <br /><ul><li>life sciences: Public Library of Science, development ofdrugs without commercial interest.</li></ul> <br /><ul><li>snowboarding, windsurfing and skateboardning industries.</li></ul>There is a belief that open initiatives will expand in to more industries around the world. <br />
  8. 8. Challenges with open initiatives    <br />Most challenges within open initiatives concern how to sustain participation over time. <br />Participation and contribution might decrease if<br />- Agendas are hijacked. <br /> <br />or <br />- A community becomes dominated by users working for corporations.<br />It is also suggested that it is important to profit from at least one of the four business models.<br />
  9. 9. Traditional Strategy and Open Initiatives<br />Ironically, we believe that the best chance for open initiatives to sustain themselves will come from returning to the perspectives of traditional business strategy. (Chesbrough et al)<br />For starters, traditional business strategy has spotlighted settings in which cooperation would likely break down.<br /> <br />Traditional strategy also provides two guideposts for value capture. The first points to IP ownership and the second points to creative management of the value chain.<br />Finally, open initiatives may allow for the creation of whole new complementary links in a value chain.<br />(Chesbrough et al)<br />
  10. 10. Real world example: Apps for California<br />Web application development contest, use Open innovation and crowdsourcingtechniques, sought the best ideas to improve government transparency and services.<br /> Strategy: <br />Bring brain storm. lead to increased productivity, improved efficiency and accuracy and better decision making.<br />Allows employees to decide what information and functionality they need (on a web page for example) so they can complete their tasks efficiently and effectively.<br />Cost effective and do not require a great deal of investment.<br />Can be used to explore new opportunities and solve problems in new ways.<br />Use a shorter research & development cycle.<br />Existing data sets can be used to create new applications and therefore new income streams. As the data already exists there is faster time to marker at lower cost.<br />
  11. 11. Sources<br />http://www.strategicinnovation.org/wp-content/uploads/c933d0f5f935a2f.gif<br />http://en.wikipedia.org/wiki/Porter_five_forces_analysis<br />

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