UGB 269 Innovation Management Report: Open Innovation Strategies

This report delves into the realm of innovation management, specifically focusing on the concept of open innovation. It begins by defining open innovation and highlighting its significance in today's business landscape. The report explores the importance of innovation in driving economic growth, solving problems, increasing productivity, and enhancing market presence. It contrasts open innovation with closed innovation and analyzes inbound and outbound innovation strategies. The analytical approach section provides a detailed breakdown of open innovation types, including intercompany, experts, and publicly open models. The report then provides a critical evaluation of open innovation with examples of companies like Coca-Cola, Samsung, and LEGO, showcasing how they have successfully implemented open innovation strategies. The report then covers the benefits and the challenges. Finally, the report concludes with some solutions.

INNOVATION
MANAGEMENT
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Importance of Innovation ...........................................................................................................3
Analytical approach ....................................................................................................................5
Critical evaluation of the open innovation with the examples.....................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Open innovation can be defined as the inflow and the outflow of information in order to
accelerate the internal innovation which will help the company to expand in the external market
(Eckhardt, Ciuchta. and Carpenter 2018) This helps the company in combining the company's
internal resources with the operators available in the external market. Present report lay emphasis
on the Open innovation benefits and challenges. It also focused on the importance, analytical
approach of the Theme. Furthermore, it focuses on the critical evaluation with examples with
some company examples like Facebook, Coco Cola and many more. At last, it lay focuses on
the Conclusion and some solutions.
MAIN BODY
Importance of Innovation
Innovation is considered as something new as everyone knows that without the
innovation there will be no progress. Innovation introduces new things as a firm unable to make
any progress as it cannot be stay relevant within the market (Saebi. and Foss, 2015). It is also
known as the process of taking useful ideas and converting them into the useful products
process, process as well as services of operation. The Useful ideas are outcomes of the
creativity that is considered as the prerequisite regarding innovation. Creativity is considered as
the capacity to combine the ideas within a unique way or as it makes useful association among
all the ideas.
The importance of innovation in business and society.
Innovation influences each and every part of the society so it is not possible to go through
everything but can focus on the most significant part that have the importance regarding the
innovation (Jung.and et.al., 2016).
Economic Growth
Technological innovation is also known as the major source regarding economic growth as it
refers to the enhance in the inflation adjusted market value regarding goods as well as services
as it can produce through an economy over the time
Solve problems easily
There is a need of the creativeness to solve the problem easily as many times an organization
faces the problems that do not seem to go away as for that there is a need to think the out of the
box to get the answer that can be never solved earlier so from this anyone can make product,
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store inventory as well as find solutions that able o makes the business better
(Chesbrough,2017).
Increases the Productivity
When a Firm's top managers can feel that they are bogged down with work as well as
struggle to get everything done as it is the time that a firm becomes more productive. To begin
this start ad find a new process. Such as to work smartly and creatively focus on the things that
should be streamline as well as what things to be cut out (Ettlinger, 2017). So that to increase
the productivity there should be focuses on the programs as well as workflows. Within the
business there is always preferred to teat the new ideas and also it is surprised through the
combination of ideas that will be surprised through the combination of ideas that can be work
together to make the plans that are more productive for the firm.
Market the business
To use various creative ideas as well as innovation to make the business stand out from the
crowd. Here the times when small business marketing can be come in. So that to make people
remember the business there is a requirement for the innovative ideas as also create a new brand
to develop a business that is quirky or also work with a non-profit firm (Galati, Bigliard. and
Petroni, 2016). By developing a unique character within the business and then market it. Here to
innovate a marketing plan that can suits the personality of the business. Here to stand out
different from other business and this will also make a unique identity among the consumers.
Reduced poverty, sickness and hunger
Developing countries also depends on in innovation a new digital technologies as well as
innovate solutions that can create the opportunities to fight with hunger ,poverty, sickness within
the poorest regions of the world. Here Developed Countries are also depends on innovation
capable of solving the issues (Ivascu,Cirjaliu. and Draghici,2016). Such as in agriculture
productivity is considered as the critical one within the developing nations that plays a crucial
role as food is produced up-to 80% within these communities. Sharing and developing
agricultural innovations for example connecting farmers to the information about the
environment conditions that can be proved an efficient way to assist the farmers to stay within
the business. As this is considers as the example that how innovations provides the opportunities
that are endless and simultaneously assist people to continue food producing and also endless
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opportunities that helps to eliminate huger and poverty all over the world (Zhao, Sun.and Xu,
2016).
Educational and Communication accessibility
As per the Annual report of the world bank 2016, among the 21 percent of the population out
of then 6 out of 10 households have the mobile phones thus this means that more number of
people have the mobile phones as compare to the clean water and sanitation. Also, the mobile
population is increasing day by day from around 96 millions to he 110 millions by 2020.
Augmented reality and voice control are considered as the mobile technology that allows
workers to work in completely new ways (Alexander, Miller. and Fielding,2015).
Technology innovation can also assist to rural areas thrive as well as becomes more sustainable
day by day. User capability or low user capability are considered as some barriers regarding the
technology adoption. Here more number of people can improve their knowledge well as access
the information despite the socio-economic positions (Vanhaverbeke.and et.al.,2017).
Analytical approach
Term open innovation is considered as a situation where a firm does not depends on the
external knowledge sources as well as resources. For examples resources like their own
employees and for innovation of services, business models, products and processes, but they are
utilizing multiple external resources for example competitors, feedback from customers, external
agencies, competitors to drive the innovation. Also, open innovation means that using the
collective knowledge as well as resources regarding external parties to assist develop areas
regarding of the business (Santo.and et.al., 2016).
To use various creative ideas as well as innovation to make the business stand out from
the crowd. Here the times when small business marketing can be come in. So that to make
people remember the business there is a requirement for the innovative ideas as also create a
new brand to develop a business that is quirky or also work with a non-profit firm (Galati,
Bigliard. and Petroni, 2016). By developing a unique character within the business and then
market it. Here to innovate a marketing plan that can suits the personality of the business. Here
to stand out different from other business and this will also make a unique identity among the
consumers.
Reduced poverty, sickness and hunger
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Closed innovation means that the company innovate only by using the internal
information available to them and the most suitable and feasible idea is being chosen which
promises future opportunities. All the ides which show less potential are being removed. They
don't believe in gaining information from external environment (Alexander, Miller. and
Fielding,2015).
There are two types of open innovation
 Inbound innovation
 Outbound innovation
Inbound innovation
It is about the acquiring and sourcing expertise from the outside the firm and scanning
the external environment regarding new information to recognize, select, utilize as well as
internalize ideas (Ivascu,Cirjaliu. and Draghici,2016).
Outbound open Innovation
Outbound innovation is considered as the purpose commercialization as well as capturing
of the ideas that are internally developed within the organization's external environment. This
can be done by selecting revealing feedback regarding a product.
These two types of innovation can be broken into the four segments
Research and development- It is used to develop the ideas as well as products that can be
accurately tuned to match the requirements of the consumers (Ivascu,Cirjaliu. and
Draghici,2016).
Insight- It is a term to use the process regarding the process of figuring out the requirements
that can be actually based on the customer intelligence and market.
Marketing- It entails the ways of gaining a competitive advantage through finding new ways
to encourage the brand as well as make the products.
Talent -It means to finding ways to connect with a more unique talent that is usually hard to
reach as well as their interest is evoking while working
(Galati, Bigliard. and Petroni, 2016).
The second type of innovation has also broken into four segments.
Intracompany- Here the information as well as collaboration can be shared through only
internally among the staff members of a company. It is not considered as the open innovation but
can count as an open innovation because it can behave similar to the open innovation in most of
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the cases generally the large organizations. It can be also considered as the open
communication in various companies (Eckhardt, Ciuchta. and Carpenter 2018).
Intercompany- Among two or more than two countries. Here the information can be shared
between the various collaborative partner companies. Here the main goal is to formed
symbiotic relationship. Here all the participants can takes the benefits of the united strength
without interfering each other work. This can be usually done to works well when the firm
specializes on the delivering within the various parts regarding supply chain.
For experts- All persons outside the firm have the required knowledge to provide the relevant
input (Galati, Bigliard. and Petroni, 2016).
Publicly open- It is considered as the most common form regarding open innovation as the
name suggest. It seems using each and every person who are willing to contribute to get the
inputs on what are the aspects regarding the products that find to be more crucial. There is an
utilization of almost of the channels that are available to reach out the masses to assist the
improvement in the product
(Jung.and et.al., 2016) .
Critical evaluation of the open innovation with the examples
Open innovations can be benefit for the various companies at the same time it is not beneficial or
failed for some companies.
Mention below companies who are benefit from the open communication
Coca-Cola
Coco cola is one of the company that can be adopting open innovation models on levels
between the other entrepreneurs and staff members form one side of the company while
costumers from the other side. Free style dispense machines is an open innovation model
presented through the Coco Cola (Chesbrough,2017). It enables users from all over the world to
mix their own flavors as well as suggest a new flavor so that they can easily get it from the
freestyle machines that can be located worldwide using the Coco Cola mobile application. With
the help of this model of open innovation pus the puts the heart of the costumers within the
production process and in addition to this also involves the suggested flavors as a part of the
external ideas that can be evaluated as well as processed considering a new product line (Galati,
Bigliard. and Petroni, 2016).
Samsung
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Samsung adopt the open innovation while Apple adopts the closed innovation. Samsung
Accelerate program can be launched through the Samsung in Oder to adopt the open innovation
in terms to build their external innovations strength with the help of this program. The first and
foremost aims is to build a collaboration among the innovators, designers and thinkers to focus
on the various solutions. To build the software and services this programs provides statistical
capital, office spaces, product support to the entrepreneurs. At present this program is available
within New York, San Francisco and Palo Alto (Alexander, Miller. and Fielding,2015).
LEGO -Creating new products from communities ideas
LEGO faced hard times in its early 1990's in terms of the Frantic Drops as well as subsequent
revenues. The new strategy that can be followed by the LEGO aimed to focus on the consumer
through both creativity and business. It is known as the LEGO's shared vision. In their online
websites ,the consumers of the Lego can design their own LEGO sets either by using Computer
3D applications or LEGO bricks. Here other users can discuss the idea and also vote for it. Once
the idea reaches the high values or targeted vote ,the firm can consider it as a new product by
giving a small part of the revenues to the creator. This model can co relate platform to reducing
the risk with innovations as the feedback from the websites provides the ideas of the business
analysts idea regarding the viability regarding new product (Eckhardt, Ciuchta. and Carpenter
2018).
Facebook by using hackathons to create fresh ideas
It is a consider as an interesting open innovation example with the Facebook as they able
to organize hackathons for their staff members. The idea brings that the staff members can able
o generate the ideas as well as innovations that makes the initial versions of them. These are the
hackathons are not only for the developers but also for anyone who can associated with the
firm in any form. Architects and developers have certain ways of thinking as it makes things
more interesting when anyone gets the ideas such as persons who works within the finance and
marketing department. When the staff members of various department meets than they actually
transmit the Knowledge as a sense I the firm can build meaningful relationships. This can
happens when the firm are innovating as well as creating something new for the organization
(Saebi. and Foss, 2015).
Pride Flag feature of the Hackathons of Facebook
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They are quite productive regarding Facebook as there are various features that can be tracked
back form these hackathons for example live chat,like button and also Facebook timeline that
are sprouted with the help of the Facebook Hackathons. The Pride flag is a feature that enables
the customer to change their profile picture and also supports the LGBTQ community within
they year that was created by the Facebook hackathon . By the two Facebook interns this idea
was coined. By the help of the hackathon . It can fastly spread throughout the firm as well as
ended by being released for the public use (Saebi. and Foss, 2015).
Failures of open innovation
Boeing 787 Dreamliner
Boeing 787 Dreamliner is an example of the failure of innovation as the company has
gone through delays in getting the flights. The professor at Harvard says argued that the
company has failed in managing the external innovation as they were not able to cooperate with
the external partner. They were being faced with managing the challenges
(Vanhaverbeke.and et.al.,2017). They are now almost 2 year behind their schedule and it turn
that the entire innovation of the company has gone wrong resulting into major failure and
reduction in the profitability (Alexander, Miller. and Fielding,2015).
LEGO Universe
This is another company which has been a failure in innovating new game and hey have
to shut down this game. The biggest mistake of LEGO was that there game required people to
buy DVD's in order to play their game, so the people did not shown much interest. They said that
the reason behind using DVD's was that the kids wants a product which is tangible that they can
feel to touch. The company went for extensive research which went disastrous for them. There
game was such a failure in the market that they have to close down the production as they have
faced a loss of around $50 million (Ivascu,Cirjaliu. and Draghici,2016).
CONCLUSION
From the above report it has been summarized that it is important for organizations to focus
on innovation for successful growth of an organization. Open innovation helps an organization to
promote information mindset towards innovation. Inflow and outflow of information within an
organization plays a vital role in accelerating internal innovation so that organization can expand
their market towards innovation for external use. There are various kinds of organizations that
are focusing on adopting open innovation model for growth of their organization. It has been
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analysed that open innovation uses collective resource es and knowledge in order to develop
required and needful areas for the growth of business. It has also been analysed that there are
various organizations such as LEGO, Coca-Cola, Samsung that has adopted open innovation
model. This model has helped them in expanding their customer base, add new product line in
order to expand their business. Open innovation helps in identifying or generating various
opportunities for the organization such as it helps the companies to generate new revenue stream,
gain competitive advantage, innovate old services and products and many more. However, it has
also been analysed that there are various limitations of open innovation that are required to be
focused on by organizations such as: revelling information which is not required to be revelled
and many more.
Solutions
Commercially viable solutions: Organizations can set some kind of innovation challenges which
will help them to gain new ideas or find solution to their existing problems. This will help them
to work on their existing or new products or services in order to deliver a new innovative service
or product. Organizations can also focus on partnership with other business organizations so that
they can work together and find a solution for their existing problem or deliver a new product in
the market.
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REFERENCES
Books and Journals
Alexander, A.T., Miller, K. and Fielding, S., 2015. Open for business: Universities,
entrepreneurial academics and open innovation. International Journal of Innovation
Management.19(06). p.1540013.
Chesbrough, H., 2017. The Future of Open Innovation: IRI Medal Address The future of open
innovation will be more extensive, more collaborative, and more engaged with a wider
variety of participants. Research-Technology Management.60(6). pp.29-35.
Eckhardt, J.T., Ciuchta, M.P. and Carpenter, M., 2018. Open innovation, information, and
entrepreneurship within platform ecosystems. Strategic entrepreneurship
journal. 12(3).pp.369-391.
Ettlinger, N., 2017. Open innovation and its discontents. Geoforum.80. pp.61-71.
Galati, F., Bigliardi, B. and Petroni, A., 2016. Open innovation in food firms: Implementation
strategies, drivers and enabling factors. International Journal of Innovation
Management.20(03). p.1650042.
Ivascu, L., Cirjaliu, B. and Draghici, A., 2016. Business model for the university-industry
collaboration in open innovation. Procedia Economics and Finance.39.pp.674-678.
Jung, D.and et.al., 2016. Perceived innovation barriers and open innovation performance:
insights from Korea. International Journal of Knowledge-Based
Development. 7(2).pp.125-142.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal.33(3).pp.201-213.
Santo, R.and et.al., 2016. Working in the Open: lessons from open source on building innovation
networks in education. On the Horizon, 24(3), pp.280-295.
Vanhaverbeke, W.and et.al.,2017. The importance of connecting open innovation to strategy.
In Strategy and communication for innovation (pp. 3-15). Springer, Cham.
Zhao, S., Sun, Y. and Xu, X., 2016. Research on open innovation performance: a
review. Information Technology and Management. 17(3). pp.279-287.
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