26.01.11<br />Stockholm School of Economics - Media Management 2011<br />1<br />How to manage outside innovation<br />Exam...
Outside innovation is done by markets and communities<br />26.01.11<br />Stockholm School of Economics - Media Management ...
Rely on outside knowledge
External source of ideas
External source of know-ledge
$5 Mio. question: How to efficiently manage this knowledge?
Formal, rule based, contracts
Competitive, profit motive
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SSE How To Manage Outside Innovation

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SSE Media Management group assignment on the article of Boudreau and Lakhani "How to Manage Outside Innovation". Exemplified by the Nintendo Wii.

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SSE How To Manage Outside Innovation

  1. 1. 26.01.11<br />Stockholm School of Economics - Media Management 2011<br />1<br />How to manage outside innovation<br />Example: Nintendo<br />Group 1b<br />Nadine Nordland, Sven Ahrens,<br />Anton Israelsson, Fredrik Kihlberg<br />
  2. 2. Outside innovation is done by markets and communities<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />2<br />0<br />Outside innovation?<br />Competitive Markets<br />1<br /><ul><li>“Open innovation”
  3. 3. Rely on outside knowledge
  4. 4. External source of ideas
  5. 5. External source of know-ledge
  6. 6. $5 Mio. question: How to efficiently manage this knowledge?
  7. 7. Formal, rule based, contracts
  8. 8. Competitive, profit motive
  9. 9. Value capture by platform owner through contracting or licensing</li></ul>Collaborative Communities<br />2<br /><ul><li>Informal, social interactions
  10. 10. Cooperative relationships, sharing
  11. 11. Extrinsic and intrinsic motivations
  12. 12. Value capture through enhanced demand</li></li></ul><li>Three factors decide on which option to choose<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />3<br />0<br />1<br />What type of innovation?<br />2<br />What’s the motivation?<br />3<br />What’s the business model?<br />
  13. 13. Identify the type of innovation you want<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />4<br />1<br />Cumulative knowledge<br />Broad experimentation<br /><ul><li>Build on past advances from others
  14. 14. Integrate skills from many diverse people
  15. 15. Example: Mozilla Firefox
  16. 16. Millions of independent developers build one version after another</li></ul>Communities<br /><ul><li>Encourage experimentation
  17. 17. Need to foster competition
  18. 18. Need for heterogeneity
  19. 19. Example: InnoCentive.com
  20. 20. Companies look for an answer to a problem, individuals can develop solution, winner gets $$$</li></ul>Markets<br />
  21. 21. The innovators’ motivation drives your decision<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />5<br />3<br />Extrinsic Motivations<br />Intrinsic Motivations<br />Status<br />Signaling and Career<br />Fun and Enjoyment<br />Reputation<br />Money<br />Reciprocity<br />Identity<br />Learning and Skills<br />Autonomy<br />User Need<br />Challenge<br />Markets<br />Communities<br />
  22. 22. There is no clear advice regarding the business model<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />6<br />3<br />Integrator Platform<br />Product Platform<br />Two-sided Platform<br />External Innovators<br />Platform<br />Platform<br />Platform<br />External Innovators<br />External Innovators<br />Customers<br />Customers<br />Customers<br />Autonomy<br />Control<br />Apple App Store<br />Gore-Tex<br />Facebook Apps<br />
  23. 23. Some remarks…<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />7<br />4<br />Hybrid models are possible, too<br />Be flexible, change if necessary<br />Match the nature of the innovation<br />Tailor the solution to your business<br />This is not about giving up power<br />
  24. 24. An example from the gaming industry: Nintendo Wii<br />26.01.11<br />Stockholm School of Economics - Media Management 2011<br />8<br />5<br />1<br />What type of innovation?<br /><ul><li>Blue ocean, groundbreaking
  25. 25. Existing gaming industry</li></ul>So, how do I make this Wii successful?<br />2<br />What’s the motivation?<br /><ul><li>Game developers want $$$
  26. 26. Developing what users want</li></ul>3<br />What’s the business model?<br /><ul><li>Licensing (Two-sided platform)
  27. 27. No direct contact with consumer at game purchase</li></ul>Satoru Iwata, CEO Nintendo<br />Competitive Market<br />

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