Emerging Trends in Open Innovation Strategy †Free Samples

Question: Discuss about the Open Innovation Strategy Management. Answer: Introduction This paper recognizes from the outset that given emerging trends in open innovation strategy, there is the formation of alliances and licensing for the transfer of inter-organizational technology is common (Ades, Figlioli, Sbragia, Porto, Ary Plonski, Celadon, 2013). In the current business environment, there is very high competition. The high level of competition requires that companies become innovative so that they can be competitive too. Every company is striving to achieve a competitive edge over others. This competitive advantage can only be sustained through increased innovation of new products and services. For this discussion, this paper has chosen Natura and W.L. Gore Associates, Inc. for an extensive debate. This article seeks to delineate how open innovation is central to success and opening up new opportunities for companies, provide a description of innovation in light managerial inputs and the forces that drive innovation in businesses. The W.L. Gore Associates, Inc. continually conducts research to ascertain the extent of application of technology. The research is focused on four critical areas that include fabrics, industrial, medical, and electronics (Brunswicker, Vanhaverbeke, 2015). The company is an American formed in 1958. It is estimated that the company has a total of seven thousand employees. The company has expanded its facilities in more than thirty countries. It suffices to mention that W.L. Gore Associates, Inc. is a company with a long tradition of innovation (Felin, Zenger, 2014; Brunswicker, Vanhaverbeke, 2015). Literature evidence shows that the company conducted product development within the organizational boundaries (Ades et al., 2013). Additionally, the research focused on the companys critical technical knowledge that was applied in-house (Hsieh, Hsieh, Huang, Huang, Lee, Lee, 2016). The W.L. Gore Associates, Inc. used to pursue closed innovation processes. It is worth noting that in th e recent past, W.L. Gore Associates, Inc. has actively collaborated with other companies in the innovation process. In collaborating with other companies to enhance innovation, W.L. Gore Associates, Inc. has employed a two-pronged approach (Hung, Chou, 2013). The first approach is based on the acquisition of technology from outside sources to implement internal research development (Cheng, Huizingh, 2014). The acquisition of technology relies on strategic alliances commonly referred to as the incoming technology transfer (King, Lakhani, 2013). The acquisition of technology requires the company to have the capacity to absorb and utilize knowledge from outside (Hsieh et al., 2016). The W.L. Gore Associates, Inc. for instance, formed a strategic alliance with Sefar AG. The strategic partnership with Sefar Limited was centered on the development of Architectural Fabrics Tech-textiles (Cui, Ye, Teo, Li, 2015). The second approach to enhancing open innovation by W.L. Gore Associates, Inc. is the exploitation of its technology in outbound open innovation (Lakhani, Lifshitz-Assaf, Tushman, 2013). This process is achieved through formulating licensing agreements that help in generating additional income (Brunswicker, Vanhaverbeke, 2015). The process requires W.L. Gore Associates, Inc. to transfer technological abilities outwards. For example, the W.L. Gore Associates, Inc. has licensed products that are made with Gore-Tex fabric and fibers (Hossain, 2015; Cui, Ye, Teo, Li, 2015). The innovation of W.L. Gore Associates thousands of products is virtually anchored only on one versatile polymer known as the polytetrafluoroethylene (ePTFE). The W.L. Gore Associates, Inc. has engineered this material to produce numerous functions. W.L. Gore Associates, Inc. has been granted over two thousand licenses across the world. These patents cover a broad range of areas of production such as medical services, processing of polymer, and electronics. The W.L. Gore Associates, Inc. applies open innovation and keeps control of core technologies and licenses. The company has given permission to its licensees to innovate in a particular field. The W.L. Gore Associates, Inc. uses product platform innovation (Hung, Chou, 2013). The product platform innovation entails the controlling of ePTFE and sharing it with external developers. In this arrangement, W.L. Gore Associates, Inc. remains the core provider of technology. The licensee is expected to innovate on the provided technology and consequently sell the finished product to the consumers. Additionally, external innovators and customers are allowed to transact freely provided that they are affiliated W.L. Gore Associates, Inc. which is the platform owner (Lakhani, Lifshitz-Assaf, Tushman, 2013; Cui, Ye, Teo, Li, 2015). The company maintains a considerable control on affiliates through the rules and regulations imposed on licensees. The platform design theory resembles that architect in which the W.L. Gore Associates, Inc. develops the architecture to necessitate platform design. In this case, external innovators are permitted to draw up the technology further. Natura is a Brazilian brand that is currently present in seven countries in South America including France. Natura has created a central unit that is headed by a vice-president who is in charge of the management of innovation, innovation, and, partnerships. The company is structured into three functions that include project and processes, intellectual protection, and relationship with partners (Brunswicker, Vanhaverbeke, 2015). The company exploits the process of forwarding partnerships. The three functions are organized in a manner that they enhance the productivity of the company (King, Lakhani, 2013; Lakhani, Lifshitz-Assaf, Tushman, 2013). Additionally, the management in Natura is tasked with identifying potential areas for investment and research partners such as universities and colleges (Ades et al., 2013). The implementation process and open innovation strategy in Natura are achieved through three core undertakings (Lakhani, Lifshitz-Assaf, Tushman, 2013). First, the company is promoting internal research in addition to the search for openness. Secondly, the company lays strong emphasis on the initiatives the teams that are responsible for partnerships. Thirdly, the company employs the bottom-up style of management to promote the flow of ideas and information (Ades et al., 2013). Employees are given greater priority to enhance innovativeness and creativity. The structure of Natura is designed to enhance innovativeness. The structure lays strong emphasis on teamwork and employees having mixed roles are placed in small teams for collaboration. On the other hand, in W.L. Gore Associates, Inc., employees are placed in small teams of between one hundred and fifty and two hundred so as to create a more personal setting. The personal environment is stressed so that there could be an interpersonal relationship among employees (Villarreal, Calvo, 2015). The interpersonal relationships are essential in enhancing innovation in the two companies. It suffices to mention that the innovative core has a profound impact on managerial consequences regarding the handling of employees in the two companies (Shipper, Manz, Stewart, 2013). It is vital to point out that the absorptive capacity is dependent on the path dependency. In this case, the absorptive capacity requires that companies possess the ability to assimilate, recognize, and application of external knowledge as far as learning and innovation processes are concerned (King, Lakhani, 2013; West, Bogers, 2014). A companys adsorptive capacity refers to the volume of technology that is being transferred based on the identification and the moving a companys technology portfolio Brunswicker, Vanhaverbeke, 2015). However, it is critical to note that in many circumstances company management does not allow outward transfer of technology or licensing of a particular technology (Lakhani, Lifshitz-Assaf, Tushman, 2013). Some of the technologies that may not be allowed for transfer are core technologies. This sanction is to prevent the loss of competitive edge and the competitive threats (King, Lakhani, 2013). The most important issue is driving force for innovation in both W.L. Gore Associates, Inc. and Natura. Indeed, the two companies are driven by demand-pull and a mix of technology-push to innovate (Lakhani, Lifshitz-Assaf, Tushman, 2013; Ades et al., 2013). In the case of W.L. Gore Associates, it has a long history of technology-push where it develops technology and markets it. Initially, the company saw the potential in polytetrafluoroethylene and later developed it into an expanded ePTFE. The expanded ePTFE contributed to a new application in electronics, medical, and fabric markets. The company makes a broad range of medical products that are applied in cardiothoracic, vascular, orthopedic surgeries, and plastics. Additionally, the company produces cables that are used in computers (Cui, Ye, Teo, Li, 2015). The fibers are used in the chemical processing and manufacture of pumps. Indeed, open innovation has enabled W.L. Gore Associates, Inc. to develop a broad range of product s for the market. It is imperative to note that customer taste and preferences in central to the open innovation process (West, Bogers, 2014). For both W.L. Gore Associates, Inc. and Natura, customer need is a key driver. The two companies apply consumer inspired innovations so as to create new products (Lakhani, Lifshitz-Assaf, Tushman, 2013). Understanding the emerging trends in customer needs ensures that a company remains to be relevant in the market (Hsieh et al., 2016). The focus on customer needs is a clear indication that demand-pull is vital in the innovation process (Felin, Zenger, 2014; Cui, Ye, Teo, Li, 2015). Both companies extensive use lead users to develop new products. Furthermore, both W.L. Gore Associates, Inc. and Natura are using new technology to turn ideas into new and unique products. The main reason as to why both W.L. Gore Associates, Inc. and Natura license their technology is to generate more revenue. The increased revenue base is essential to gaining and sustaining the competitive advantage (Nyln, Holmstrm, 2015; King, Lakhani, 2013). With the expanded technology, the two companies can access a large market base which has consequently increased their revenues. Additionally, both W.L. Gore Associates, Inc. and IBM apply strategic drivers selling products that meet customer needs. The sale of additional products is attained as a result of increasing demand (Saebi, Foss, 2015). The companies have been licensing weaker rivals to use their technology so that they can deter stronger competitors from entering the market (West, Bogers, 2014). The two companies desire to license technology is motivated by the need to learn and leads to compression of a companys learning curve (Shipper, Manz, Stewart, 2013). The two companies are licensing their technology so that they can strengthen their inter-organizational networks (Nyln, Holmstrm, 2015; West, Bogers, 2014). Licensing of technology is critical in increasing, maintaining, and expanding the network of the companies. Both W.L. Gore Associates, Inc. and Natura are capturing value from technology in the open innovation process. However, technology licensing can lead to reduced profits which might weaken competitive advantage (Pisano, 2015; King, Lakhani, 2013). Both W.L. Gore Associates, Inc. and Natura have developed dynamic capabilities to aid in technology licensing. These capabilities are achieved by continuous exploration of innovation so as to capture strategic and monetary opportunities (Vanhaverbeke, Cloodt, 2014; King, Lakhani, 2013). The two companies are keen to avoid possible adverse effects through systemization in the internal exploitation of technology (West, Bogers, 2014). The Natura has developed friendly and open corporate culture to create an innovative atmosphere. Just like W.L. Gore Associates, Inc., Natura has developed systems where there are formal bosses and have mechanisms and system for self-evaluation (Villarreal, Calvo, 2015). In the case of W.L. Gore Associates, Inc., employees are provided with incentives. These employees are allowed to have shares in the company. Conclusion The two companies are striving to enhance open innovation to improve their competitive advantage. The open innovation strategy employed by the companies to aimed at providing successful transfer of technology between organizations. From the ensuing discussion, licensing and strategic alliances is central to open innovation process. Both W.L. Gore Associates, Inc. and Natura are implementing a strategy focused on exploitation and exploration in their innovation undertakings. 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