Open business is a business model that creates value that cannot be achieved by individual companies by collaborating with other companies and sometimes consumers on research and development that is normally done only by the company .
R & D of new technologies and new products is monopolized by the company and is usually carried out in a closed environment, but in recent years, the life cycle of technologies and products has become shorter, and more speeding up of R & D is required. It came to be. Therefore, by opening up our own technology and developing products, an open business model that encourages innovative technology development is attracting attention much faster than developing by ourselves .
- 1 Relationship between open business advocates and open innovation
- 2 Characteristics of open business
- 3 Success conditions for open business
- 4 Advantages of open business
- 5 Disadvantages of open business
- 6 Examples of open business companies
Relationship between open business advocates and open innovation
Open business is a business model based on the idea of ” open innovation ” advocated by Henry W. Chesbrough of the University of California, Berkeley in 2003.
“Open source” is a concept similar to open business. Open source “Innovate products by publishing software development data and sharing it with multiple companies and consumer communities” is the same as open business, but “open innovation” is the key concept of open business. “ Open sources often lack a business model ,” said Chesbrough, who advocated. Therefore, an open business is one that develops a business model that can be distributed to the market by forming a tie-up with an outside company from the research and development stage.
Characteristics of open business
Inside-out is a method of creating new value by opening internal ideas and assets to external partners .
One of the successful examples is Intel, which had a high reputation in the 1980s, but the structure of the interface that connects the MPU and its module part denial in order to expand the MPU (microprocessor) business, which was still small, at once. Opened the technology. As a result, even Taiwanese manufacturers with no brand power can use Intel processors, and can compete on the same level as leader companies. As a result, Intel’s business partners have expanded dramatically. The strategy, which requires the logo to be attached to the computer itself, is also skillful, and we have succeeded in making consumers aware of the Intel brand name.
Outside-in is a method of bringing external ideas into-house . In the latter half of the 1990s, P & amp; G faced a financial crisis as its stock price fell. Ideas tended to be buried as the vertically divided organization became huge and dispersed all over the world, resulting in increased waste in research and development. So P & amp; G adopted an open strategy. Under the name of “Connect & Development”, we first opened “Innovation Net”, a universal technology development site, on the in-house infrastructure net. On the site, research and development of more than 100 themes such as biology, science, and packaging are carried out in teams of people from different research departments, and some research themes are disclosed to outside researchers and experts. Did. It has become possible to quickly carry out epoch-making research and development that cannot be achieved by ourselves. For example, the company’s popular confectionery, “Pringles,” is popular in the United States, where “Pringles Prinz,” which is printed with quizzes on each sheet, is popular. This was developed not through in-house research and development, but through online interaction with external researchers. It was a big hit by delivering new value to consumers, which is exciting at parties.
Success conditions for open business
There is a business segregation between the company and an external company
When we jointly develop new value, the process of monetizing that value realizes coexistence and co-prosperity when our company and other companies have different areas of expertise . The more companies you partner with, the more important it is to pre-design which company’s technology creates value in which part of the business model, which company has which allocation. It also leads to the important question of whether to make a profit.
Expanding partners involved in product and service development
In an open business, it is important to have a wide range of partners involved in product and service development. If we can combine our core technology with the services and distribution of multiple companies, we will be more likely to expand the scope of open business. As the spread increases, the possibility of new products and services will increase.
Advantages of open business
Can create new value
In open business, you can create new value by researching and developing products and services in collaboration with companies and consumers who have technologies and knowledge that you do not have. In addition to using the new technologies and services created there in-house, there is also the possibility that new value will be created by providing them to the market by providing licenses. In this way, it is also a characteristic of open business that everything is done in an “open situation”.
May create a big market
Even if a large company cannot enter the market because it is a small market, we will create new products and services that can be launched even in a small market by conducting research and development in collaboration with small companies and the consumer community, and The market can grow . GlaxoSmithKline, a British pharmaceutical company described below, is creating new markets even in poor countries by researching and developing new drugs as outside researchers and local researchers in this way.
Disadvantages of open business
Risk of intellectual property leaking to the outside
In this business model, where multiple companies have knowledge from the development idea stage, there is a risk of disclosing knowledge and technical information that the company has not yet patented. In that case, there is a risk of intellectual property leaking to the outside , so it is necessary to carefully conclude the scope of information disclosure and confidentiality in advance.
Revenue distribution becomes ambiguous
Whether or not all participating companies can determine the distribution of profits that they are satisfied with will greatly affect the realization of new products and services. “ It is reasonable for the person who first came up with the idea, or the person who devised the most important business model that can utilize the idea, to get priority rights ,” said Chesbrough.
Examples of open business companies
SECOM, a Japanese company that provides security services to companies and ordinary households, develops new security products and services with various companies based on the knowledge and data obtained from crime prevention know-how.
For example, the company has collaborated with companies such as “NEDE”, “KDDI”, and “Terra Drone” to provide remote shooting with drones through 4G LTE lines in order to realize security in a range that could not be seen with conventional security cameras. I am working on an experiment to send. This project was jointly developed using SECOM’s “security system”, Terra Drone’s “unmanned aerial vehicle operation management technology”, and KDDI’s “network technology”.
SECOM is also developing home security using the dog-shaped robot “aibo” with Sony, and developing glass with a built-in security sensor together with window glass maker “AGC”.
Danish toy maker LEGO has succeeded in its unique strategy of “open innovation between the company and the customer community.” LEGO has released an interesting original work using blocks from people outside the company on a website named “ LEGO IDEA “, and actually commercialized the one that won more than 10,000 votes by fan voting. I am. Popular works are being created one after another, such as paying a fixed dividend from sales as an incentive to the poster of the work, and surely making a Lego model that reproduces the Beatles record jacket.
LEGO IDEA has successfully opened up a market for adults who were not previously LEGO customers, and in 2014 the company became the world’s largest toy company.
Gore is a company that developed “Gore-Tex”, a material that is windproof, waterproof, and breathable. Originally Gore was a manufacturer of polymer materials, but instead of simply providing the materials, we worked with fabric manufacturers to develop fabrics that are more waterproof and moisture proof. Gore-Tex has promised to “use only high-end, high-class fabrics,” and as a result, Gore-Tex has become popular in outdoor products as a high-quality, high-end fabric. In addition, the “GORE-TEX” logo has been added to products, such as “intel inside”, adding to the value of the brand.
GlaxoSmithKline, a huge British pharmaceutical manufacturer, is practicing open business using a method called “patent pool.” This is to disclose the in-house intellectual property that is not used so that external researchers can access and use it. We are building a system that will lead to the development of not only new drugs that can take a large market, but also new drugs for diseases that are widespread in poor countries even if the market is small.