Introduction
Our client, XYZ, has designed a radically innovative smartphone yet its current business model is ill suited for its commercialisation. A firm's Business Model (BM) is the articulation of the processes through which resources are leveraged to create and deliver value to stakeholders allowing the firm to generate a profit (Chesbrough,i2010). XYZ must therefore undergo a fundamental overhaul of its BM to successfully bring to market its new smartphone.
The smartphone industry is characterised by high competition especially amongst manufacturers with Samsung (30%) and Apple (13%) dominating the market (Gartner). It recently experienced a disruptive shift with the success of Google's Open Source Operating Software (OS), Android, which many manufacturers now use rather than their own proprietary OS. Thus XYZ must not only compete with manufacturing titans but also find innovative solutions to develop software able to compete with Android and iOS.
Open Innovation (OI) theory, introduced by Henry Chesbrough (2003), has gained significant attention from firms seeking to use external agents to increase the efficiency of their R&D. This report will outline how XYZ can use OI tools to design an innovative BM allowing it to bring to market a product ecosystem set around its phone.
A first part will outline the implications of BM Innovation. It will argue that XYZ must promote coupled processes with partners and leverage Outside-in dynamics to increase its market potential. Secondly, it will focus on the app creation process showing that XYZ must release parts of its Intellectual Property (IP) either through licensing or Open Source depending on the necessity of proprietary OS relative to value capture if it wishes to develo...
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The ability to capture values along the Technology Adoption Lifecycle determines not just how successful a firm will be, but whether it will create competitive advantage through technology. Businesses with large fixed costs, capital-intensive business plans, and specialized asset bases will face the challenge to maintain its strategic continuity because it is generally prohibitively expensive to change direction to response to any conceivable structural change.
Innovation has rapidly assumed a position of prominence in world competition on a global scale. To compete in this environment, organizations need a level of innovation. As competition becomes more global and time-based, organizations must develop and deliver new and superior products or services in less time. The challenge for modern organizations is to revitalize them so they can successfully and continuously develop newer products and enhance business development.
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