Why Companies Should Have Open Business Models Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Because of two trends - the growth of R & D expenditures and revenues decreased product (due to the short life of the product) -) the company is becoming more difficult to justify the investment in innovation. Business models that cover open innovation address both issues. Development costs reduced by innovative greater use of external technology in its own R & D process of the firm. This saves time and money, and the company will no longer limit itself to the markets it serves directly. Now he is involved in other segments through licensing fees, joint ventures and spin-offs, among others. These various streams of income to create more total revenue from innovation. To participate more fully the benefits of open innovation, companies need to develop the ability to experiment with their business models, finding ways to open them. The construction of this feature requires a process for experimentation and evaluation of their results. While this may seem obvious, many companies simply do not have the processes in place. In most organizations, there is not one person is missing the Director General is responsible for the business model. Instead, the business unit managers (which are usually placed on their jobs in just two to three years), as a rule, take the business model for granted. To understand how an organization can open their business model, the author gives specific examples of IBM, P & G, and Air Products, the three companies that operate in different industries with very different technologies and products. Everyone used to work with a very internally focused, closed business model, and has since migrated to a business model that is much more open. "Hide
by Henry W. Chesbrough Source: MIT Sloan Management Review 9 pages. Publication Date: January 1, 2007. Prod. #: SMR231-PDF-ENG