Allan Bett Kiplangat

 Innovation Models Student Name University of Affiliation Course Name Professors Name Date Differences and similarities between the closed models of innovation and the open innovation model Open innovation differs from closed innovation in that it draws ideas for new features and products from a wider range of sources than just internal brainstorming. On the other hand, closed innovation relies only on its own internal network of experts and employees to generate new ideas. Both have their uses and may potentially bring to game-changing inventions that are money well spent. Among the most well-known examples of closed innovation is Apple's tremendous success. Apple's software is tightly linked and coordinated, with no third-party additions permitted. Apple is able to protect its reputation by preventing knockoffs and unapproved alterations to its goods because to the firm control it has over product development and the release of new versions. The result is that Apple is able to keep its signature look across all of its devices and updates. Every time Apple introduces a new product, we get a glimpse of the success of its internal method for generating fresh ideas. You will not find out anything about the product's creation until its release. Becoming larger and more powerful, it gradually transitioned from an open innovation paradigm into a more closed, reinforced one. Coca-Cola is widely regarded as an early pioneer in the practice of open innovation. The Atlanta, Georgia-based beverage firm was instrumental in the 1960 development of the fountain dispenser system, a staple of the restaurant sector today. Coke's Freestyle Dispenser Machine is where the company's flavor researchers get their first real-world feedback on potential new tastes from soda customers across the globe. With the use of a mobile app, consumers may experiment with different taste profiles and share their findings with the Coke R&D team. Similarities Whether innovation is open or closed, various businesses profit in different ways. The incredibly challenging job of thinking, developing, workshopping, and ultimately constructing a new feature or product is done within a very transparent, internally created framework, which is one benefit of both innovations. This enables staff members of a startup, for instance, to get direction for their concepts and often faster and more meaningful feedback early in the process. Another benefit is that this tightly managed and highly regulated environment makes it much simpler to comply with the law when developing new features and products. How Open Innovation Practices Can Affect Firm Innovation Performance As a result, companies all over the world are putting in more efforts to embrace open innovation and reap its benefits for company expansion and development. The concept of open innovation rests on the assumption that businesses may and should use external sources, as well as local and international distribution channels, to advance their technologies (Hervas, 2021). The basic notion is that no company can succeed alone; instead, in today's interconnected world, businesses should or may form alliances with other organizations in order to create something novel or take part in a development-promoting movement. Thus, this approach is known as open innovation since it allows businesses to draw on ideas and methods from outside the company. For instance, a company may generate internal ideas, and then those ideas can be disseminated via novel external channels, yielding something of substantial value. As a defensive move, businesses may embrace open innovation with the goal of lowering product development expenses and limiting potential losses. Offensive partnerships are more common, since companies do so to gain an advantage over their rivals by using the expertise and inventions of others to improve their own products and services. Product enhancement increasingly includes the incorporation of third-party expertise and resources by many firms. It has been said that the distinction between open innovation theory and the indigenous closed model is so murky in practice that many companies resort to using a mix of the two approaches. According to Lopes, 2017, this paradigm states that in order for businesses to progress their technology, they must consider and implement both internal and external ideas and pathways to market. As a result, it is essential that data be shared both internally and externally so that the firm can have access to the sources of its value. Open source, user innovation, crowdsourcing, and co-creation are all terms that are often used in conjunction with open innovation. Open business models allow a company to more effectively generate and collect revenue. As a general rule, businesses that embrace open innovation get these rewards. They have better prospects for growth and success. Investing in R&D may be difficult to justify for many businesses. That's because the price of technology has skyrocketed, and companies can't be sure that their money will be well spent since investing in new gadgets doesn't always pay off in the form of increased profits or beneficial innovations. Open innovation strategies also reduce the costs and time required to bring new products to market after technological advancements (Lopes, 2017). When open innovation is implemented in front of the wrong audience, it might dampen a company's inventiveness. It may be challenging to attract the right sort or number of guests, and investing too quickly or carelessly might result in a loss of funds. Businesses have an ethical responsibility to thoroughly assess their external partners to ensure they can provide the necessary resources and knowledge to assist the company succeed. One disadvantage is that the advantages of open innovation decrease with time. The longer businesses invest in innovation, the more money they will have to spend on it. An optimistic company would realize that this indicates there were unanticipated repercussions that need to be reduced, but time constraints make it imperative that they know how long they have to keep the project going. One other limitation on open innovation is the creation of effective procedures. Getting the most out of open innovation demands a concerted commitment to back the whole process. Yet, there may be constraints on the capacity to construct such a comprehensive process due to issues such as insufficient buy-in from key stakeholders, muddled communications, an inability to accurately gauge progress, and an absence of clear goals. Firms have a hard time putting open innovation into practice. Including open innovation as part of a company's portfolio is a challenge for most companies. The reluctance of many organizations to adopt this approach is, in part, due to the paucity of data available on the strategy's efficacy as a whole. Identifying intellectual property at the appropriate moment is another critical barrier to open innovation (Usman, 2017). Although it is true that open innovation requires companies to be open and share their innovations with others, it is also true that knowing when to keep something secret may lead to significant competitive advantages. The Nokia Company is cited as an organization that freely shares its non-essential ideas with nonprofits and smaller companies. Nonetheless, the vast majority of businesses choose to hold on to their patents even if they aren't being actively employed. This is evidence of Nokia's dedication to open innovation. Finally, strong management procedures must be in place to back up open innovation, since the difficulty of regulating invention rises with the number of parties participating. When people work together on an innovative project, they may reveal information to one another that might hurt their business. Conclusion Firms have a hard time putting open innovation into practice. Including open innovation as part of a company's portfolio is a challenge for most companies. The reluctance of many organizations to adopt this approach is, in part, due to the paucity of data available on the strategy's efficacy as a whole. Identifying intellectual property at the appropriate moment is another critical barrier to open innovation. Although it is true that open innovation requires companies to be open and share their innovations with others, it is also true that knowing when to keep something secret may lead to significant competitive advantages. The Nokia Company is cited as an organization that freely shares its non-essential ideas with nonprofits and smaller companies. Nonetheless, the vast majority of businesses choose to hold on to their patents even if they aren't being actively employed. This is evidence of Nokia's dedication to open innovation. Finally, strong management procedures must be in place to back up open innovation, since the difficulty of regulating invention rises with the number of parties participating. When people work together on an innovative project, they may reveal information to one another that might hurt their business. References Hervas-Oliver, J. L., Sempere-Ripoll, F., & Boronat-Moll, C. (2021). Technological innovation typologies and open innovation in SMEs: Beyond internal and external sources of knowledge. Technological Forecasting and Social Change, 162, 120338. Lopes, C. M., Scavarda, A., Hofmeister, L. F., Thomé, A. M. T., & Vaccaro, G. L. R. (2017). An analysis of the interplay between organizational sustainability, knowledge management, and open innovation. Journal of cleaner production, 142, 476-488. Usman, M., & Vanhaverbeke, W. (2017). How start-ups successfully organize and manage open innovation with large companies. European Journal of Innovation Management. Andrade Rojas, M., Saldanha, T., Khuntia, J., Kathuria, A., & Boh, W. F. (2021). Overcoming innovation deficiencies in mexico: use of open innovation through it and closed innovation through IT by small and medium enterprises. Chesbrough, H. (2003). The logic of open innovation: managing intellectual property. California management review, 45(3), 33-58.