10. Appleyard, M. M., and Chesbrough. (2017). The Dynamics of Open Strategy- From Adoption to Reversion.pdf Flashcards
(10 cards)
What is Open Strategy in the context of innovation?
Open Strategy refers to a firm’s approach to innovation that involves external collaboration and transparency, allowing outsiders to contribute and access results.
Example: Linux is developed by a global community and made freely available to all users.
What are the two branches of Open Strategy?
The two branches are the content branch, which focuses on sustaining open innovation economically,
the process branch, which emphasizes participatory and transparent strategy formulation.
Example: IBM’s open-source contributions reflect the content branch, while collaborative planning with external stakeholders reflects the process branch.
What does it mean for a firm to revert from open to closed strategy?
Reversion occurs when a firm that initially adopted an open innovation approach later shifts to a more proprietary, closed strategy.
Example: Google initially opened Android but later restricted access through proprietary apps and services.
Why might a firm adopt an open strategy initially?
To accelerate adoption, reduce development costs, improve quality through community input, and build a supporting ecosystem.
Example: Google opened Android to attract developers and compete with Apple’s iOS.
What are common reasons for reverting from open to closed strategy?
Accumulated internal capabilities, desire for control, market maturity, and the need to capture value more directly.
Example: Amazon forked Android to create Fire OS, gaining control over its app ecosystem.
How does market maturity influence open strategy decisions?
In early markets, openness attracts users and partners. In mature markets, firms may close off to capture more value as growth slows.
Example: Google tightened control over Android after achieving dominant market share.
What is the role of technology prowess in open strategy?
Firms with strong internal capabilities may initially open up to build ecosystems but later revert to closed strategies once they can sustain innovation independently.
Example: Google’s growing software expertise enabled it to reduce reliance on external developers.
What organizational competencies support open strategy?
Key competencies include technology prowess and internal processes that facilitate collaboration, legal compliance, and community engagement.
Example: IBM restructured its internal processes to support Linux development and community participation.
What is the difference between internal and external versioning in hybrid strategies?
Internal versioning maintains control while allowing some openness; external versioning involves licensing or sharing IP to ensure stability or meet customer demands.
Example: Intel licensed chip designs to AMD to meet customer requirements for second sourcing.
How do customer preferences affect open strategy?
Customers seeking variety may favor openness, while those prioritizing stability may prefer closed systems.
Example: Apple’s iOS appeals to users who value a stable, controlled environment.
