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Open Innovation
• Using as a basis (or if you wish taking the biotech firm Gilead as an example) discuss when an “open” innovation model would appear appropriate and when a traditional “closed” innovation model would be appropriate. Think about the innovation complexity, timeline, feasibility and long-term financial implications in your answer.
Next answer either A) or B) not both
A) From the early days of the automobile, all the way till perhaps 25 years ago, automobile firms designed the cars and internal systems in-house. They then contracted with firms outside to manufacture components and subsystems to specifications that were proprietary.
• Why do you think automobile firms in that period followed a “closed” system. Why do you think such a closed system was beneficial?
• In recent years, car companies have adopted an open system. For example, Toyota’s Safety Sense System may have been developed by partner firms. Similarly many brands like Mercedes-Benz and Volkswagen rely on the expertise of outside firms like Bosch and Siemens to develop and manufacture important systems that are then incorporated into their cars.
• In switching to an “open innovation” model, what benefits (list 4 and explain each one in a short paragraph) do automobile companies expect?
B) There is a firm called threadless.com n) that invites the general public to submit designs for new T-shirts from which a fairly small number are chosen for sale to everyone.
• How does this open innovation model benefit the firm?
• How does the ability to submit designs benefit the people submitting designs?
• What is in “it” for those who submit designs if NO one in the general public knows the “author” of the designs?
• What if the author of the designs names were made public? What would be the benefits? Would there be any risks to Threadless?
