The Consequences of Open Innovation Model

This paper explores the concept of open innovation as a key driver for competitive advantage in a volatile business environment. It seeks to answer the question: Should companies embrace open innovation as a business model considering the wealth of opportunities that it may enhance as evident in IBM, P &G, and Air Products case? Whilst this paper does not totally contend with the notion that, the involvement of other parties in developing new products and technologies (i.e. open innovation) can add value to companies, considering the fact that, an open platform increases adaptability while providing numerous benefits to companies and also, to its customers, namely: Products and services better adjusted to the market; Flexible cost structures; Increased creativity and; Mitigation of business and financial risks. However, there could be instances when openness may turn from virtue to vice, common challenges in this instance are: Protection of intellectual assets and intellectual property (IP); Structural challenges; Contractual complexities; Competitive implications etc. Thus, it will be crucial for companies to clearly understand the capabilities, skills and knowledge that make them unique in the market, so that they can clearly define what they need to outsource in their innovation processes. It is also important to ensure intellectual property rights and minimised knowledge lead risks through appropriate protection strategies