Competition Between Healthcare Organization and Healthcare Industry

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Introduction
With the emergence of technological advancement the competition between the healthcare
organizations in the healthcare industry has got increased to a great extent. Innovation is being
considered to be one of the most efficient tools for an organization in order to deal with
enhanced competition as well for enhancing consumer satisfaction and profit margin. The open
innovation strategy is gaining popularity in current industries including the pharmaceutical
industry. The chief reason behind this this innovation technique has made it possible for the
organization to leverage. Useful knowledge scattered among firms, universities, individuals and
the public domain so that competitive advantage can be gained. In the following essay
explanation of the reason behind applying the open innovation model by Eli Lilly’s Open
Innovation Drug Discovery platform has been conducted.
1. What is open innovation? Provide a concise summary of the theory.
The term open innovation refers to the usage of purposive inflows as well as outflows of
knowledge within an organization for accelerating internal innovation along with expanding the
market for external usage of the innovation. According to researcher, once an organization
adopts the open innovation strategy, the boundaries of the organisation become highly permeable
(Bogers, Chesbrough and Moedas 2018). This in turn, allows the organization to combine the
resources with external co-operators. In a nutshell, the open innovation strategy can be defined as
the process of combining the internal resources with the external resources for boosting the
innovative culture within an organisation. One of the major examples of implementation of the
open innovation strategy is Microsoft. This company possess more than 10 value pools that
include start-ups, think suppliers, consumers and universities for considering their open
innovative effort. . Thus it can be said that the open innovation model is a business s model that

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encourages and enables an organization to connect with the outside sources so that new product
opportunities, higher pool of talent can be collaborated with in order to ensure enhancement of
recognition and profit margin.
According to the open innovation theory, all the organizations possess the capability and hence
should use external ideas along with internal ideas and internal and external paths to the market
for ensuring technological advancement. The strategy of open innovation is confined within the
firm but is also included user innovators, creative consumers as well as communities. The chief
idea of the management that implement the open innovation strategy in an organization is that in
this era of technology where knowledge is easily accessible and is widely distributed,
organizations cannot afford to rely completely in their own research for retaining as well as
enhancing their performance. Hence organizations opting for implementation of open strategy
tend to buy or licence processes of innovation from other organizations. This process is termed
as inbound open innovation. On the other and, internal innovation that are not being used by an
organization I also taken outside the form through joint ventures, spin offs or licencing. This
process is known as outbound open innovation. For decades, organizations have been using the
vertical integration approach where the internal research and development activities result in
development of products which are then distributed by the organization.
Some of the major benefits of implementing an open innovation strategy by organizations are as
follows:
a. Innovating old products as well as services: Older services provided by
organizations often possess the potential to be better in order to attract consumers.
Open innovative strategy ensures implementation of a creative team in order to
improve the service as per the demand of the consumer.

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b. Decrement and sharing of R&D risks and costs: open innovation enables the
organization for sharing the risks as well as the costs of their Research and
development processes. Shared partnership on the other hand results in more
skills technologies, human capital and resources. This in turn results in significant
decrement of expenditure that is needed for ensuring specific pre-determined
projects.
c. Faster R&D process: Another way the Open innovation strategy and help the
organization is by expediting their time to the market. An business can select to
acquire valuable technology with the help of in licensing or a purchase of
ownership rights rather than losing precious time in developing is own substituent
of technology. Thus, this approach is considered to be highly valuable specially in
industries like healthcare and information technology.
d. Leveraging instruments: Open innovation possess the potential of creating a pool
of possibly for influencing the state of the market along with the behaviour of
other predominant factors in the commercial environment. One of the major
instances of leveraging instrument includes patent pools. In patent pools, a good
amount of valuable IP gets shared amongst the members. This process has the
potential of producing technological breakthroughs that can create new ones.
2. What is OIDD? Describe the structure and features of this open innovation
platform, how it worked and evolved, success factors, and performance.
The Open innovation Drug Discovery (OIDD) platform has been launched by a highly popular
American pharmaceutical organization named “Elli Lilly and Company. The OIDD platform has
been designed for tackling different types of barriers that comes in the way of innovation with